Our 2nd Quarter Wrap-up is called "Surfing the Slow Burn." The "slow burn" http://solari.com/blog/?p=818 is my term for a centrally managed economy in which a small group of insiders covertly subsidize themselves at the expense of the outsiders through (i) monetary policy, (ii) manipulation of government resources, regulation and enforcement and (iii) manipulation of financial markets and data.

What was most remarkable in the second quarter was the distinct advantage enjoyed by those who have taken the time to understand what is happening and have positioned themselves to navigate the changes underway. The lesson of the second quarter is that understanding the "real deal" is the basis for effective action.

Indeed, when enough of us begin to do so, the possibilities for effective change grow exponentially. So despite all the "shock and awe" around us, something very positive is happening as more and more of us shift our thinking, take action and reach out to collaborate.

In our year-end wrap up, 2008: Looking Back http://solari.com/blog/?p=1929, I said that the big question of 2008 was the same one I have been asking as $4 trillion went missing from the US government: "Where is the money?" http://solari.com/blog/?p=501

In our 1st Qtr 2009: Looking Back http://solari.com/blog/?p=2379, with bailouts approaching $12-14 trillion and counting (See Bailout Mo' Money http://solari.com/blog/?p=2258), I said that the importance of this question continued to grow. With the laws related to public and private financial management treated by insiders as mostly irrelevant, the global financial coup d' etat underway was becoming more apparent http://solari.com/blog/?p=2058.

As I prepare our wrap up for the second quarter, the importance of missing money keeps growing as unemployment rises towards Great Depression levels http://solari.com/blog/?p=3342 and an out of control financial system keeps getting wierder. (See The Missing Money http://solari.com/blog/?p=3208 and $134.5 Billion Mystery Bonds http://solari.com/blog/?p=3276)

The signs are growing that the Wall Street banks have now built their war chest and are moving to ensure that Main Street is on its knees or worse as they move in for the kill. (See Stimulus or Economic Hit? http://solari.com/blog/?p=3313) Signals of subtle capital controls that will help to force the continued flow of capital to Wall Street are growing as well. (See Foreign Financial Accounts http://solari.com/blog/?p=3269 and Financial Coup d' Etat...401k Trial Balloon? http://solari.com/blog/?p=3297)

Legislation promoting control of food (See Food Safety Bill http://solari.com/blog/?p=3330), health care (See Big Cuts in Medicare and Medicaid Coming http://solari.com/blog/?p=3122 and The Data Beast http://solari.com/archive/databeast) and finance (See Obama's Sweeping Financial Regulation Plan http://solari.com/blog/?p=3228) is pending; as is energy legislation to create the framework for resource taxation and, through carbon trading, create a new generation of fraud and derivatives that embroils localization efforts in businesses that depend on government engineered corporate profits.

When all of this legislation is viewed in totality, there will be no need to formally shred the U.S. Constitution since no one will be able to understand, let alone comply, with the trillions of rules related to every aspect of our lives and we certainly will not be able to pay the taxes and fees associated with staying alive anyway.

It would appear that the American people understand the legislative and appropriation wave rolling over us. I estimate that for every $1,000,000 awarded or loaned to the large banks in bailout money, Americans purchased one gun and 10,000 rounds of ammunition.

As I described in my last June Solari Report, state governments have been temporarily supported with the stimulus package. As predicted, the pain at the state and municipal levels has continued to rise with the California budget crisis serving as a bellweather. (See Shock Doctrine California, Part I, II, III, IV http://solari.com/blog/?p=3209.)

As hopes for a last minute bailout from the federal government continue, Martin Weiss is now predicting that default is inevitable on $59 billion of California municipal bonds. This could send shockwaves through the entire muncipal market. If the Feds let California go down, more states are likely to follow. State and local land and assets, such as parks and open lands, will be ripe for the plucking. (See Financial Ecosystems http://solari.com/blog/?p=3171)Modify message« Last Edit: March 19, 2016, 11:58:02 am by Luck »

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http://solari.com/podcast/Solari_Report_Digest-2.mp3 Catherine points out the high cost of doing things on the cheap at the state and local levels, and the potential boom to these same economies, when the larger financial ecosystem is taken into account. When we were talking about agriculture and I read you Sir James Goldsmith's statement, where he talks about looking at the cost of something on an inclusive basis, looking at not just making food the cheapest possible, but making all the social and infrastructure costs attributable to a change in the agriculturatl system and incorporating them in your assessment of costs. ... A lot of the promotion of centralization and incorporations has come from making very complex rules, that requires government at federal, state and local levels to do the cheapest thing within their budgets, or their line items, instead of doing the cheapest thing ecosystem-wide. There was a story up on the blog several months ago about a wonderful woman in Florida. She was unemployed, worked hard all her life, got herself unemployed, got food stamps, had a problem with the food stamps, called customer service hotline and proceeded to get somebody in India, working for J.P. Morgan-Chase. And the absurdity of the state of Florida paying people to not work, while, you know, they were basically paying somebody in India to do the same job that that person could do, struck her as ridiculous. Well, it turned out in the various media coverage of this story that they mentioned that Tennessee also had a contract for the food stamps with the same Indian site of J.P. Morgan-Chase. So one of the things that the Financial Permaculture Institute has decided to do at our event on September 22nd is to map out the financial ecosystems in and around the Tennessee food stamp program and social services program. Why do we have thousands of acres of farmland laying fallow and people not working, when, in fact, we're bringing in food from heaven knows where, far, far away, when ... people here could just be simply growing food and feeding themselves, not to mention doing the data service and customer servicing jobs. So this is going to be a fabulous real-world exercise. The reason I'm excited about it is it brings up the question how can we re-engineer government, so we do the thing which is cheapest for the taxpayers system-wide - not just within one little program item or line item. Believe it or not, if you unleash that one change, as the state and local budgets cut back, there's a huge amount of jobs and income that can be swung into local economies. It's a wonderful way to relocalize your economy. So I want to encourage anybody who's interested in that, to stay tuned, or to join us in September, the 22nd, at the Financial Permaculture Summit, here in Tennessee. It's a whole methodology you can take back to your county, and, I'll tell you, if we want to create real jobs and income in counties, what we have to do is stop trading them out. That's the first thing to be doing is to just stop shipping them out, when it doesn't make economic sense. ... If you can't join us in Tennessee, we hope to have the information available to you in other ways online afterward.

Here's an article about how the Feds go after alternative money promoters http://solari.com/blog/?p=3626 and below is the last portion of it, which suggests a safe alternative: silver and gold coins, which will soon be needed, when regular dollars become scarce, I mean worthless.

The Federal Reserve & US government have set their feet on a path that very well may destroy the US dollar by hyperinflation. They have massively inflated the money supply to avoid the collapse of a corrupt banking & financial system, because that system is their real master. For one of three reasons, you will have to turn to US legal tender gold and silver coin.

1. If government hyperinflates the dollar, you'll need an alternative money to survive. US silver & gold coins are already at hand, already legal. 2. The US monetary and financial system will never be reformed until we stop using their phony money. As long as you use their money, they control you, your future, and your capital. Only specie money can free you. 3. Facing a collapsing national economy, we must revive local economies. To do that we need a local money that will stay local. Various community currencies have been tried, but in the end they are only unworkable toys that won't last. Anyway, if they did catch fire, the government would outlaw them and prosecute the issuers. As long as they remain only left-wing play-pretties, the government doesn't care.

Doesn't have anything to do with you? I'm afraid that in 6 to 18 months, you will understand all too well what this subject has to do with you, and that's why I'm trying to convince you, now, to learn how to do business with gold and silver coin. (To that end, Catherine Austin Fitts and I have created a website, www.silverandgoldaremoney.com that automatically gives you the gold and silver coin equivalent of any Federal Reserve note amount, and tells you how to pay it in numerous gold & silver coins.)

HOW TO START

How do you start? Well, ask everybody you deal with whether they want to be paid in paper, or in silver and gold. Ask the plumber, the handyman, the hardware store, the grocery store, the dentist, the doctor, the mechanic. Just ask - worst they can do is say No. Carry a little silver & gold around with you. When the waitress brings your check, hold out silver in one hand and paper in the other. See which she takes.

Wait, wait! One last thing. What about foreign or privately issued gold or silver coin? At 31 USC 5103 it says that foreign gold and silver coins are not legal tender. Right, but doesn't appear to present a problem. If you don't have legal tender American Eagle gold coins, the seller can by private contract agree to accept some other gold coin at the same rate, although you cannot force him to take them as legal tender. For instance, by the American Eagle standard, a British sovereign with 0.2354 troy ounce of gold would be worth (0.2354 X $50) or $11.77.

And a privately minted one ounce silver round? Well, by the American Eagle standard, that would be valued at one dollar, wouldn't it?

How would I know? Me, I'm no lawyer, so don't listen to me. Check it out for yourself.

As for hyperinflation, the bond market just doesn't seem to be concerned. And ShadowStats is still showing downward trending of the out-of-system M3 money multiplier. We might have euphoria in the markets, but we have unemployment on the Main Streets.

Cotton-based dollars if over produced would become worth their utilitarian value... which is pretty low, something like four or five cents. But to the lay person it would appear in reality that every thing else was becoming much more valuable.

Even the US Cent (penny) would appear to be worth maybe several US dollars.

I believe one of the goals of the swine flu vaccine is depopulation. Perhaps it is the goal of a swine flu epidemic as well, whether bio-warfare or hype around a flu season.

These days, I keep remembering my sense of urgency leaving the Bush Administration in 1991. We had to do something to turn around the economy and gather real assets behind retirement plans and the social safety net. If not, Americans could find themselves deeply out on a limb. I felt my family and friends were in danger. They did not share my concern. They had a deep faith in the system.

As my efforts to find ways of reengineering government investment in communities failed to win political support, Washington and Wall Street moved forward with a debt bubble and globalization that was horrifying in its implications for humanity.

Overwhelmed by what was happening, I estimated the end result. My simple calculations guessed that we were going to achieve economic sustainability on Earth by depopulating down to a population of approximately 500 million people from our then current global population of 6 billion. I was a portfolio strategist used to looking at numbers from a very high level. Those around me could not fathom how all the different threads I was integrating could lead to such a conclusion. To me, we had to have radical change in how we governed resources or depopulate. It was a mathematical result.

A year later, in 1999, a very capable investment and portfolio strategist asked me if he could come have a private lunch with me in Washington. We sat in a posh restaurant across from the Capitol. He said quietly that he had calculated out where the derivatives and debt bubble combined with globalization were going. The only logical conclusion he could reach was that significant depopulation was going to occur. He said his estimates led to an approximate population of 500 million. I said very quietly, “that’s my estimate too.” I will never forget the look of sadness that crossed his face. I was amazed to find someone else who understood.

It turns out that we were not alone. Sir James Goldsmith had warned of the consequences of GATT in 1994. He described the process under way, involving the loss of land and livelihood for 3 billion people, “…This is the establishment against the rest of society.” Voices were rising around the planet as hardships exploded from global economic warfare and industrialization of agriculture.

As trillions of dollars were shifted out of America by legal and illegal means to reinvest in Asia and emerging markets and to build a global military empire, we left a sovereign nation economic model behind. Finally, the expense and corruption of empire resulted in bailouts of $12-14 trillion, delivering a new financial war chest to the people leading the financial engineering. Now we have exploding unemployment, an exploding federal deficit, an Inspector General for the TARP bailout program predicting that the ultimate bailout cost could rise to $23.7 trillion and a Congressional Budget Director who is concluding that we can no longer afford the social safety net.

That is, unless you change the actuarial assumptions in the budget – like life expectancy. Lowering immune systems and increasing toxicity levels combined with poor food, water and terrorizing stress will help do the trick. Review the history of vaccines rushed into production without proper testing and peer review - it is clear about the potential side effects. In addition, a plague can so frighten and help control people that they will accept the end of their current benefits (and the resulting implications to life expectancy) without objection. And a plague with proper planning can be highly profitable. Whatever the truth of what swine flu and related vaccines are, it can be used as a way to keep control in a situation that is quickly shifting out of control.

In short, an epidemic can be used to offset the inflation of capital with increasing deflation of the value and income of labor and continual demand destruction. It is a great deal of time and money spent on something that will not help build a real economy. The disinformation and control opportunities are profound. They keep the slow burn going. It is the next, meaner face of “the establishment against the rest of society.”

That’s what I believe. I am not an expert. I have no case worth presenting in a court of law. There are hundreds of hours of research on the swine flu and related vaccines that I have not done and I am not going to do. It is just what I believe, listening to the people I respect, and in no small part because if you map out all the financial ecosystems around the issue and people and incentives involved, it seems to me to be the logical conclusion.

Now, if this sounds ludicrous to you, it may be because you do not appreciate how dark the culture has become that is now in charge. Do you have any idea how impossibly frustrating it is to manage a highly centralized system in which the vast majority of people lack any responsibility to ensure that the whole thing works? Everyone wants their free lunch and there are no real markets or democracy to force accountability or a shared intelligence. Force works. Force has increasingly become the way to achieve most everything. Using force is a lot easier than living with rising risk and the costs of subsidizing an aging population.

So the question for you and me is “what do we do?” Are we going to take a vaccine? Are we going to allow our children to be vaccinated? Will we have a choice? How can we organize to make sure that we do? Is self-quarantine a practical option? How would we prepare for it?

What you believe is your responsibility. The time has come to build time into Summer schedules to research options, discuss them with those you trust and make informed decisions about what you believe and what actions you intend to take under a variety of scenarios.

I don’t have the answers yet. Somehow, I believe we can find them together. And while we do, let’s remember to pray for the love of humanity to be rekindled and nourished in each and every heart.

The swine flu pandemic warning is more related to the nature of the deaths up to this point.Flu kills thousands of Americans every year; but it tends toward the young, old, and those with weakened immune systems.Swine Flu results in death from a cytokine storm feedback loop develop within a healthy strong immune system.

ABW (Advanced Biological Weapons) are mostly RNA-engineered versions of common viruses, such as rabies, for which an immune host carrier is developed.

Unfortunately the conspiracy theory of overpopulation isn't accurate... as the limitations are socially derived, not physically.

Flu kills thousands of Americans every year; but it tends toward the young, old, and those with weakened immune systems. - John

* Vaccines and many medications, as well as poor nutrition, weaken the immune system. So the cause of the weak immune systems is the cause of the deaths from flu.* No vaccines have ever been proven to be safe or effective. Vaccines have not reduced the incidence of diseases. The stats show that the diseases were all greatly declining before vaccines were developed. The true cause of such declines was apparently cleaner water and cleaner food processing etc.* How do you know about bioweapons?

* Libertarians and Anarchists would find much of this latest LaRouche org's video interesting, despite objections to their "welfare state" arguments, as it's about the current popular uprising against Obama and Congress: http://larouchepac.com/lpactv?nid=11396

Flu kills thousands of Americans every year; but it tends toward the young, old, and those with weakened immune systems. - John

* Vaccines and many medications, as well as poor nutrition, weaken the immune system. So the cause of the weak immune systems is the cause of the deaths from flu.* No vaccines have ever been proven to be safe or effective. Vaccines have not reduced the incidence of diseases. The stats show that the diseases were all greatly declining before vaccines were developed. The true cause of such declines was apparently cleaner water and cleaner food processing etc.* How do you know about bioweapons?

About 20,000 Americans die every year from the flu. That's why it surprises me that the MSM is still trying to scare us with so many hundreds of deaths from H1N1. What ever happened to AIDS and car accidents?

LaRouche on how the Fed is hyperinflating money and how to stop it, possibly via Ron Paul's bill, or crash is imminent, with runs on banks etc after Sept 30: http://larouchepac.com/lpactv?nid=11892

Actually we're in deflation. The FED eased credit through lower interest rates (which also lowers the interest payments on the national debt), but it doesn't seem to be leading to real growth. This is most likely due to the historically low margin requirements and already low interest that persisted just previous to the downturn.

Its doubtful we'll see much more interest easing from them... and there is fear that ongoing budget deficits will result in asset reallocation as interest rates try to rise.

Flu kills thousands of Americans every year; but it tends toward the young, old, and those with weakened immune systems. - John

* Vaccines and many medications, as well as poor nutrition, weaken the immune system. So the cause of the weak immune systems is the cause of the deaths from flu.* No vaccines have ever been proven to be safe or effective. Vaccines have not reduced the incidence of diseases. The stats show that the diseases were all greatly declining before vaccines were developed. The true cause of such declines was apparently cleaner water and cleaner food processing etc.* How do you know about bioweapons?

Vaccines are focused on triggering an immune system response prior to a natural exposure to a virus. I think you'll find that cleaner water and food processing is more about bacteria. Flu deaths tend toward two formats... dehydration or cytokine storm.

ABW were a centerpoint of BioShield, and though GW signed it into law... it was developed during the late stages of his father's Administration.

About 20,000 Americans die every year from the flu. That's why it surprises me that the MSM is still trying to scare us with so many hundreds of deaths from H1N1. What ever happened to AIDS and car accidents?

Actually, not that many people die from AIDS. I think the Gov't likes AIDS because it lets them push a conservative agenda and scare young people away from having sex and producing offspring. After all, only the chosen members of the Oligarchy should be allowed to have children. Here's a site with interesting figures on how insignificant HIV/AIDS is in the USA:

http://www.fairfoundation.org/

Also, several H1N1 flu strains have infected humans in the 1800's and 1900's. Only in 1918 was there a random chance mutation that made H1N1 strain influenza infection particularly virulent. I think this particular H1N1 outbreak will be mild and provide some protection for the populous against future H1N1 outbreaks.

Flu kills thousands of Americans every year; but it tends toward the young, old, and those with weakened immune systems. - John

* Vaccines and many medications, as well as poor nutrition, weaken the immune system. So the cause of the weak immune systems is the cause of the deaths from flu.* No vaccines have ever been proven to be safe or effective. Vaccines have not reduced the incidence of diseases. The stats show that the diseases were all greatly declining before vaccines were developed. The true cause of such declines was apparently cleaner water and cleaner food processing etc.

Infiltration of neutrophils into the lung tissue are what most often cause death from H1N1 flu. Essentially, the immune system becomes very active and sends large numbers of phagocyte cells (T-Cells) to kill infected cells. The lungs become inflamed, essentially flooded, with immune system cells. It gets to the point where the exchange of carbon dioxide and oxygen is disrupted and the patient suffocates. The mutation in 1918 that caused human immune systems to have such a strong response is unlikely to reoccur. But, it could happen.

There are many different types of vaccines including LAV (Live Attenuated Virus), Killed Virus, and Protein vaccines. In Protein vaccines specific proteins, usually surface proteins (like HIV's gp120/gp41 (gp = glycoprotein)) are injected into the individual and wind up in the patient's dendritic cells where they are used to train T-Cell lymphocytes through an evolutionary process. Protein vaccines have a very small chance of causing any problems for the patient. Most often, problems associated with protein vaccines are auto-immune disorders due to protein similarity between virus proteins and natural cell receptor signaling proteins (remember that virii bind to signal receptors that your body uses to send communications between cells). Killed virus vaccines are essentially complete whole virii that have been deactivated, usually through radiation exposure that breaks apart the Hydrogen/other bonds of their DNA /RNA sequences. Killed virus vaccines are the safest along with Protein vaccines. LAV vaccines are genetically engineered vaccines in which pathology causing genetic sequences (such as toxin encoding genes - codons) are removed by enzymes. LAV's are the most dangerous because they actually cause infection of the Human body and LAV vaccine virii may mutate back to disease causing forms. A specific example of a dangerous LAV vaccine is the polio vaccine. It is often used in Africa and mutation back to a disease causing sequence occasionally occurs causing an out break of the polio disease among those who have not be vaccinated.

I personally take every Killed Virus and Protein vaccine that I can get after they have been out for a while. But, I do not take LAV vaccines unless I absolutely have to. If people ask me about their kids, I tell them to get all vaccines but LAV's.

The AstraZeneca/MedImmune H1N1 nasal spray vaccine is a LAV. It has been fast tracked. I, like many of the front line health workers, will not take it.

A cytokine storm, or hypercytokinemia is a potentially fatal immune reaction consisting of a positive feedback loop between cytokines and immune cells, with highly elevated levels of various cytokines.[1]

...

Role in pandemic deaths

It is believed that cytokine storms were responsible for many of the deaths during the 1918 influenza pandemic, which killed a disproportionate number of young adults.[1] In this case, a healthy immune system may have been a liability rather than an asset. Preliminary research results from Hong Kong also indicated this as the probable reason for many deaths during the SARS epidemic in 2003.[6] Human deaths from the bird flu H5N1 usually involve cytokine storms as well.[7] Recent reports of high mortality among healthy young adults in the 2009 swine flu outbreak has led to speculation that cytokine storms could be responsible for these deaths.[8] However, the Centers for Disease Control and Prevention (CDC) have indicated that symptoms reported from this strain so far are similar to those of normal seasonal flu,[9] with the CDC stating that there is "insufficient information to date about clinical complications of this variant of swine-origin influenza A (H1N1) virus infection."[9]

* This video http://larouchepac.com/lpactv?nid=12055 I think says the main problem of the economy since 1987 or so, when Greenspan took over the Fed I think, and earlier as well, is that the government has been supporting monetary value instead of productive value. It says the current movement in the U.S. of citizens protesting the government at town hall meetings, tea parties etc is the early phase of a mass strike phenomenon, similar to the 1989 demonstrations in East Germany, that brought down the government and led to Germany's re-unification. There's a report from a man in Germany about the 1989 event that's rather interesting. It also announces LaRouche's recently updated economic plan for a real recovery.* LaRouche has been warning that a global economic collapse is likely to begin by mid-October, with a run on the dollar or the like. Http://solari.com has a link to a recent article that said the "Web-Bot" predicts something similar on about October 25.

* This video http://larouchepac.com/lpactv?nid=12065 says the Fed [which Eustace Mullins found is owned by Britain] is encouraging the fall of the dollar and that, since there is no other currency suitable for world currency, the global economy will soon collapse. Isn't that correct?* Monetary value I think means mistakenly regarding money as an asset, whereas productive value means correctly regarding production as true assets, while money is merely a means of communication or the like. That could probably be better explained.

* This video http://larouchepac.com/lpactv?nid=12065 says the Fed [which Eustace Mullins found is owned by Britain] is encouraging the fall of the dollar and that, since there is no other currency suitable for world currency, the global economy will soon collapse. Isn't that correct?* Monetary value I think means mistakenly regarding money as an asset, whereas productive value means correctly regarding production as true assets, while money is merely a means of communication or the like. That could probably be better explained.

Money is an asset, since it can be used to pay debts and taxes. It will remain somewhat valuable until this is no longer true, which is a long time out no matter what. There's nothing inherently wrong with that, other than the fact that it's being used to concentrate power into the hands of our statist lords and masters, and as a platform for redistribution of wealth.

Furthermore, there are a number of currencies which could serve as as global reserve currency, in the unlikely event that the dollar collapses altogether. Gold and silver are naturally favored by those of us who don't like printing presses, and the euro has a pretty strong position as a currency which there is tons of, but the rules of the currency union (enforced by other states who don't want their own currency devalued) ensure it will be reasonably stable.

* This video http://larouchepac.com/lpactv?nid=12065 says the Fed [which Eustace Mullins found is owned by Britain] is encouraging the fall of the dollar and that, since there is no other currency suitable for world currency, the global economy will soon collapse. Isn't that correct?* Monetary value I think means mistakenly regarding money as an asset, whereas productive value means correctly regarding production as true assets, while money is merely a means of communication or the like. That could probably be better explained.

Nope. The FED was created by an Act of Congress, and can be dissolved by Congress any time it wishes. I wouldn't say the FED is encouraging the fall of the dollar, just unable to stop the fall dueto the fiscal position the US is in.There are plenty of other currencies suitable for use as reserve currencies, along with several metal, etc. Its just a matter of the sovereign funds diversifying their portfolio holdings... which many of began to do already.

Financial Fraud Wrecking the Economy, by Catherine Austin Fitts [edited and paraphrased by Luck]http://tickerforum.org/cgi-ticker/akcs-www?post=113197&ord=1538462[Catherine has an investment newsletter at http://solari.com. She was a Wall Street investment bank manager, then Assistant Secretary of Housing at HUD in the first Bush Administration and later a financial advisor to the FHA in the Clinton Administration.]

Starting in 1989 in the first Bush Administration, my first order from Housing Secretary Jack Kemp was to clean up HUD. It was at the end of the Iran-Contra affair and the Savings and Loan scandal. The agency kept very poor records and didn’t know whether or not it was in compliance with the law. The law said HUD was supposed to be self-sustaining by charging enough for mortgage insurance to make a small profit. She learned that two HUD regions were together losing over 11 million dollars a day. Those were centered in Texas and Colorado. The Texas district included Arkansas, so both the Bush and Clinton administrations were from the same district, which was engaging in financial fraud, stealing taxpayer money for private interests. The Department of Justice in 1998 said that the US financial system launders $500 billion to a $Trillion a year. [Laundering money means money made from illegal activities is invested in legitimate businesses in order to conceal where the money came from.] A government reform group I was part of worked mightily to get laws passed to require the government to produce audited financial statements starting in 1995. To date it has never once done so. That was in both the Clinton and the Bush administrations. At the end of 2004 right after the election, the U.S. Treasury wrote off 4 Trillion dollars of missing money, stolen by private interests and again refused to produce audited financial statements. America's rise to power has been fueled by having a system that provides the lowest cost of capital. [Capital is money or assets used for acquiring an income stream. The lowest cost of capital is capital that is stolen, or obtained by selling stolen goods, by scamming buyers, or as a gift, such as from taxpayers. Low interest rates on loans also provide a low cost of capital.] The guy with the lowest cost of capital wins. If a franchise business has investors who are dealing drugs into your neighborhood that it can finance, taking over your market share of business in your neighborhood for less than zero, it's a neighborhood leveraged buyout. The people who can combine organized crime with government securities and stock market financing can get the lowest cost of capital. The Clintons' rise to the White House was fueled by the Iran-Contra operations in Arkansas. The drugs and arms transshipment point in Mena, Arkansas had allegedly been one of the most significant operations under the aegis of the first Bush Administration’s National Security Council asset, Oliver North . Some said that as much as $100 million a month of arms and drugs flowed through the airport at Mena. The stories and lore, whether about the goings on or the deaths of the many people who tried to stop or expose them, took up thousands of pages on the Internet, but never seemed to work their way into the 'official reality' of national TV and newspapers. In August of 1996, the San Jose Mercury News broke Gary Webb's story of illegal narcotics dealing by the US government, targeting South Central LA with crack cocaine. The San Jose Mercury News was known as having the finest website of any newspaper. Its location in Silicon Valley meant that the techies read it and took it seriously. The story was serialised, but what was different was that the website crew took the time to scan in thousands of pages of supporting legal documents available to read or download from its website. Thousands of Americans had copies of the original documentation. The evidence was hard. The allegations were true. The story was now out of the control of the official reality cops and was helping Americans come to understand that one of the most profitable businesses in America, illegal drugs, might not be run by black teenagers and Colombian warlords, but by representatives of their own government. When people learn about the financial fraud driving our economy, they often don't want to change the system, because they’re benefiting from it. I said once to a group of seemingly conscientious people: What would happen if we stopped being the worldwide leader in laundering dirty money and if we stopped narcotics trafficking in every neighborhood in America? They said the stock market would go down because that money would go to the Hong Kong stock market and we might have trouble financing the deficit so our taxes might go up or, even worse, our Government checks might stop. So I said, if we had a button we could push that would stop all narcotics trafficking tomorrow, who here would push the button? Out of about 100 people only one hand went up.

HOW THE MONEY WORKS: THE DESTRUCTION OF NEIGHBOURHOODS [by Catherine and edited by me]The model works about the same in every country, although the particulars vary between domestic and international agencies and the military and enforcement bureaucracies. Some call it the securitisation process. Some call it corporatisation. Some call it privatisation. Some call it globalisation. What this means in layman's terms is that the management of resources is centralised. This is done through a system of securitisation based on privilege and coercion, rather than performance and the rule of law. From the viewpoint of the neighbourhood there are six ways to centralise local capital: First, you consolidate all retail sales into a few large corporations, including franchise operations, cutting out local small business. Second, you outsource ('privatise') all local government functions to a few large corporations or subject them to such an overwhelming amount of federal regulation that they can be controlled and managed for the benefit of a few large corporations and their investors. Third, you buy up all the land and real estate, or encumber them with mortgages in a way that is as profitable as possible and allows you to get control when you want it. Fourth, you finance the entire process with the profits from narcotics and organised crime that you market into the neighbourhood. This enables you to lower your cost of capital and the initial price of your investment and weakens your competition. They buy your business and land with your money at a fraction of the cost. No one sells her home faster and cheaper than a mother trying to make bail or pay a lawyer to save her family from jail or death. That is why narcotics trafficking is the ultimate form of neighbourhood leveraged buyout. Fifth, you leverage all of this with tax shelters, private tax-exempt bonds, municipal bonds, government guarantees, and government subsidies, all protected with complex securities arrangements. Sixth, you ensure that the only companies and mutual funds allowed meaningful access to capital are those run by syndicate-approved management teams. To raise significant campaign funds, candidates for political office appoint syndicate-approved management teams. Investment syndicates define the boundaries of managed competition that cycle all capital back through their pipelines. That means the only local boys who can make good are those who play ball with the syndicate. In this way the private equity in a community can be extracted at a near infinite rate of return to investors and a highly negative rate of return to taxpayers. While it would be nice to learn the truth of what fraud, if any, has transpired, what is important is to get our tax dollars managed properly and if money is missing, get it back. Scandals and blame games are not as useful as getting a proper system of resource management in place and recovering any stolen money.

The Participatory Democracy Project at Chicago’s 49th Ward under the direction of Watson Institute for International Studies at Brown University is indeed exciting. Participatory budgeting has the potential to strike a much healthier relationship between citizenry and the creation and application of government credit, regulation and taxes. Developed originally in Brazil, it has not yet been tried in the United States. The opportunities to re-engineer government resources in communities are much greater than many of us realize. Alas, we have a significant challenge with many Americans and companies now dependent on billions in government programs developed through political considerations without professional investment standards and accountability for performance. America is filled with “community arbitrages,” which offer the potential to get much more for less if we approach change with a new concern for people, natural resources and both public and private financial resources. To find and re-engineer these opportunities is a complex task, ideally done with citizen participation. One of the reasons to map your financial ecosystems, is because it is best to understand existing resources and what has been happening to them before you take action. Those who don’t know history are doomed to repeat the mistakes of the past. The reason we are considering participatory budgeting is in response to the prospect of significant reductions in municipal revenues and spending, due to economic decline, because of federal government sanctioned financial fraud. An approach that leads to real solutions is to step back and look at the bigger picture, the full financial ecosystem. For example, rather than just looking at the immediate assets on our municipal balance sheet, let’s incorporate the enormous pools of state and local pension funds and other capital reserves. * Are we investing them in ways (A) that create income in our economy or (B) that strip our economy and savings with leveraged buy outs and mortgage frauds? * Who is getting the fees from these pools? Is it (A) ethical firms or is it (B) the same Wall Street banks that have been so instrumental in recent financial frauds? * Where are all the government contracts related to activities in our communities? (A) Do they reflect productive expenditures, or (B1) are we pumping up corporate stocks (B2) paying someone $50-150 an hour to do something that (A2) someone in our community would love to do for $10-25 per hour plus health care benefits? * Are we outsourcing tax payer funded jobs to Asia while paying Americans unemployment, welfare and food stamps, hence removing the jobs here that would save taxpayers funds, when we look at government budgets on an integrated basis within a place? * What are the laws and regulations that create public and private expense in our place and who is making or losing money from them? Is it time to reinvent some fundamental rules? So that’s how we can look at the bigger picture. We also need to look at the bigger picture through time. Available assets are not just those currently existing. We need to understand whether we are missing assets—either to understand the drains in our economy so we can heal them presently or determine if there are methods to recapture missing assets. In short, we want to understand who and what drained assets and what the state of economic warfare in a place is so that we can create lasting change. * Who has been distributing narcotics into our communities? (See: "Narco Dollars for Beginners.") * Who has been engaging in mortgage fraud? (See “The Myth of the Rule of Law.”) * What money has gone missing from our various levels of government, including off balance sheet agencies and arrangements? (See: "The Missing Money.") * What has been the impact on savings of Federal Reserve monetary policy and the manipulation of the precious metals and financial markets? (See: "Positioning Your Assets" and "Positioning Your Assets: Is Your Community Waving Goodbye to $3.3 Billion?.") * Are public or private financial institutions engaging in usury, fraudulent inducement or other practices that are grounds to judicate recovery of illegal profits or abrogation of fraudulently created liabilities? We need to find a process in which such questions can be asked. Let’s step back and look at some of the financial ecosystems around the Chicago project. There are numerous investment interests represented on the Watson board and the Brown Corporation board, including a Citigroup board member and several former Goldman Sachs partners, both of which companies are known to engage in financial fraud. How the private interests of the board members relate to the Corporation’s endowments and investments is worth considering, because many private financial interests have profited in ways that are highly destructive of communities. Are we to understand and address the root dynamics or not? The federal Administration, with the assistance of Congress, has redirected trillions of taxpayer resources to the very banking and investment interests that are responsible for the economic crisis and their thefts are exhausting our currency and our borrowing capacity, thanks in part to the so-called “bailouts.” Can our neighborhoods afford profligate banks but not local parks and services? When cutbacks came in the 1990’s in Russia, Eastern Europe, and Latin America, highly profitable asset stripping is what happened. Do we run the risk that the investment interests that have engaged in such financial coups are now interested in using the same model to asset strip American communities? America does not have an economic problem. We have a political problem, which subsidizes a kleptocratic financial sector that no society can possibly afford. If we are going to transform to a healthy society, we are going to have to clean up our behavior and our money on both Main Street and Wall Street. Let’s map our financial ecosystems first, so that healthy participatory budgeting is real.

* I guess this is Alex Jones's latest video, Fall of the Republic: http://www.youtube.com/watch?v=VebOTc-7shU (http://www.youtube.com/watch?v=VebOTc-7shU). There's also a transcript of it at http://lincoop.lefora.com/2009/11/28/nwo/page1 (http://lincoop.lefora.com/2009/11/28/nwo/page1). The video's over 2 hours long, so the transcript may help. Toward the end of the transcript is mentioned a lot of spying on citizens by fellow citizens that's being paid for under FEMA and Homeland Security fantasy. Like even the Boy and Girl Scouts are being trained to snitch on their own families for "carbon crimes" like letting the water run too long.

2009: The Year of the Great Vampire SquidJanuary 7, 2010 at 3:01 pmThe world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.- Matt Taibbi, “Inside the Great American Bubble Machine”

The Great Vampire Squid

For years, it was hard for many of us to fathom the psychopathic nature of our financial elites, or to expand the meaning of Matt Tabbi’s marvelous description of Goldman Sachs, the great vampire squid. Squid seems a fitting name for the financial cartel that drives what I have traditionally called the Tapeworm.

There were some who saw the danger immediately and tried to warn us, like Sir James Goldsmith. There were some, like myself, who tried to prevent the housing bubble and find alternatives to investing our life savings in it.

While those efforts did not stop the squid, they certainly made it clear that the squid take down of the planet was, indeed, part of a plan. That’s all documented now.

The Squid Shifts the Money

I often tell the story of my meeting with a group of pension fund leaders in 1997 in which the President of the CalPERs pension fund— the largest in the country—said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall (of 1997). They are moving it to Asia.”

Sure enough, in the fall of 1997 trillions of dollars began to shift out of North America and into the emerging markets, including Asia and China. This included over $4 trillion that went missing from the US government, which I have referred to for years as “the missing money.”

My back-of-the-envelope estimate was that approximately $10 trillion was moved out legally and illegally between that fall of 1997 and 9-11. Given the implications to US pension funds and retirement savings, I have said for years that perhaps the most important question of our generation is where did the money go and how do we get it back?

To the squid’s credit, shifting investment from places with aging populations to places with younger, more dynamic populations makes sense. Problem is that oftentimes the money left by sneaky means, leaving many high and dry to the benefit of the few engineering the moves. Equity owned by the many disappeared out the back door, and turned up in Asia owned by the few.

It is likely that not all the money went to Asia. There are, of course, offshore accounts for all those involved indicated by the extraordinary growth of private banking and offshore havens. It would appear that significant funds went to the black budget, including the high tech weaponry capable of providing enforcement of investment terms and conditions in foreign lands without a friendly legal infrastructure. There are also questions about space investment and whether corporations are not just mining the natural resources around the globe but on other globes as well.

Squid Crime Pays

The criminality of this massive capital shift was extensive. If there was any doubt of the profound and growing influence of narco dollars, the European Union’s lawsuit against RJR (under the ownership and control of leveraged buyout firm KKR) for global money laundering in partnership with the Russian mafia, Latin American drug cartels and Saddam Hussein’s family told the tale. Economic warfare tactics were used to drain money from those we most feared, such as Russia. (See Financial Coup d’ Etat.)

The squid would justify its actions by saying that consensus in a democracy for forward thinking investment moves was not possible. The reality was that global “pumps and dumps” produced phenomenal returns. The “strong dollar policy,” made possible by the suppression of the gold price, lifted the value of the dollar while convenient “credit crisis” ensured that equity positions could be bought up cheap on the other side of the globe. The genetic reengineering of the seed supply and the industrialization of agriculture would permit central control of the most politically powerful market in the world - one that would support a global digital currency in the way that oil and gas have supported the U.S. dollar.

The US Housing and Derivatives Bubble

However, the most important source of capital was the theft of U.S. retirement savings through the engineering of the U.S. housing and debt bubbles. This involved issuing trillions of securities and derivatives, secured by shoddy or non-existent collateral, representing fraudulent inducement on a massive scale.

In the process, the great vampire squid sold trillions in fraudulently overvalued securities to US investors and pension funds as well as retail and institutional investors around the world.

The Squid Hits the Fan

In 2008, global investors finally realized that they had been stuck with fraudulently issued securities by the great vampire squid. The nature of the collateral fraud and questionable practices in the US mortgage and derivatives markets had been understood. However, millions of investors assumed the squid could be counted on to maintain the global ponzi scheme.

By early 2009, the squid was facing a global financial bloodbath that could potentially cook its members into little bits of calamari. Those stuck with bum paper were threatening to pull their money out of the squid and worse.

Riding to the rescue was Barack Obama. Based on what was clearly extensive domestic and global profiling, the great vampire squid spent approximately $1 billion (and likely more covertly) to get Obama elected in November 2008 and adored globally. The squid’s returns make this the single best performing investment of 2009 and the decade, if not the last century.

Chart: http://Opensecrets.org (http://Opensecrets.org)

Bloomberg recently announced that gold was the best performing investment for the decade. They failed to mention that gold’s near 300% rise of the decade could not compare to the exponential multiplication achieved in a much shorter period by the squid’s financing their Presidential candidate into the White House. Electing a Harvard lawyer who inspired the hopes and dreams of those who had been most brutally drained by the housing bubble and drug wars clearly was a stroke of financial genius. While gold had passed the $1,200 per oz. level before the end of the 2009, its performance still did not compare to the $10,000 plus per oz. the squid was realizing on the opium flowing from the fields in Afghanistan.

This is not in any way to diminish the importance of the squid’s investment in governmental and private intelligence agencies. However, at times like this, you can’t kill everyone. Although, we admit there were moments in 2009 when it started to look like someone was trying. (See 1, 2, 3, 4, 5, 6, 7)

From the Revolutionary War through 2009, the U.S. government accumulated $12 trillion in debt. And then, in one year, President elect and President Obama restored to office the very people who had engineered the fraud. With the squid’s preferred team in place in the White House, at the US Treasury and at the Department of Defense, President Obama led the gifting and lending of an additional $12 Trillion to the great vampire squid.

Let me underscore the enormity of this number again. An amount equivalent to all the debt we had accumulated in 252 years and numerous wars we gave or lent to the squid in one year.

And so it was that the banks of Europe were relieved of their fraudulent paper while the Federal Reserve balance sheet ballooned with toxic assets. No doubt in profound gratitude and appreciation for President Obama’s extraordinary political achievement, a grateful Europe bestowed upon him the Nobel Peace Prize.

In the meantime, with strong support from the Federal Reserve and U.S Treasury, the great vampire squid was able to engineer extraordinary profits on high-risk speculative investments by an amount sufficient to “pay back” bailout loans, fund dividends to shareholders and pay their leaders huge and hideous year-end bonuses.

The Squid to Main Street: “Drop Dead!”

Capital it would seem is available only for squid speculation. The real economy is a source of capital for the squid. It is no longer a use of capital. Hence, drain on communities and the failure to reinvest in serious innovation and long term U.S. growth accelerated during 2009.

The political reality is that the U.S. government is deeply dependent on the squid to finance growing deficits, engineer global economic warfare and manage markets in the precious metals, oil, commodities and financial markets. So with U.S. unemployment over 10% (says the government) or 20% (says John Williams at www.shadowstats.com, a far more reliable source) and significant unemployment around the globe, the great vampire squid couldn’t care less what the man in the street thinks.

As Dick Cheney said about deficits, “they don’t matter.”

The Squid Bottom Line

In 2009, the great vampire squid finished engineering the single greatest financial shift in the history of the planet. It took two decades and constituted a financial coup d’ etat. Even our hero Congresswoman Kaptur said so.

The year finished with the field commanders within the squid congratulating themselves and paying themselves richly for a “job well done.”

Without a doubt, 2009 was the year of the great vampire squid.

The Good News

The good news is that those of you who took to heart the risks and opportunities we discussed in our 2008: Looking Back did a good job of evading the squid. You were energized by the opportunities and not drained by events. I have been heartened throughout the year by your efforts and success stories. Our goal is to help you continue to thrive in these uncertain times. Indeed, the more who do, the greater the opportunity for us all.

* This link says state sales tax receipts, I think, show that the economy is very much NOT in recovery:http://market-ticker.denninger.net/archives/1839-If-Consumer-Spending-Is-Improving,-Where-Is-It.html (http://market-ticker.denninger.net/archives/1839-If-Consumer-Spending-Is-Improving,-Where-Is-It.html)* And this one says, not only that, but martial law is very possible, and, after that, a military coup is also possible, so we need to promote constitutional militias post haste. Right?http://thedailybell.com/724/Edwin-Vieira-the-Coming-Military-Crackdown.html (http://thedailybell.com/724/Edwin-Vieira-the-Coming-Military-Crackdown.html)

I would suggest that the economy is not quickly recovering to its previous level of private expenditure.

A military coup, while always a remote possibility, would not be put down by a local militia...or even thousands of local militias.It would most likely fail along the lines of officers upholding their oaths.

* The following is from Catherine Fitts's webpage: http://solari.com/blog/?p=5960

The Layman’s Guide to Mind ControlCatherine and The Solari Report,February 4, 2010 at 3:02 pm

“Your greatest weapon is in your enemy’s mind.”-The Buddha

Who controls your mind? Is it you? Or is it someone who wants to control you or profit at your expense?

* Are your opinions determined by your assessment of the important facts in a given situation? Or are they manipulated by subtle broadcast techniques spawned by billions of dollars of research on how to get you to act against your own best interest? * Are you spending years and thousands of dollars getting an education that gives you an accurate picture of how the world works? Or are you learning a history created by the “winners” – a history that was intentionally designed to serve the future control of a hidden oligarchy at your expense? * Do you keep choosing leaders that have been credentialed and promoted by private interests to engineer the destruction of your rights and the theft of your assets? Why? * Are your thinking and your ability to act deteriorating as a result of intentional promotion of destructive agendas by means of vaccines, processed foods, water fluoridation, pharmaceuticals and chemtrails? Are you lured by false promises of financial reward, inclusion, and social prestige into promoting these and other harmful substances or pretending they are not a problem? * When you choose vendors for your business, is it because they offer the best services with integrity or because they use entrainment and subliminal programming on phone calls without your knowledge? Does their understanding of your business reflect trap doors that they have illegally included in the software programs they sold you or high tech eavesdropping of your internal meetings? Have they planted someone in your business who works for them to “manage” your opinions from the inside?

* When your children consume violence on TV and in video games, are they being entertained? Could it be that they are being programmed with the same methods that the intelligence community has used to train assassins to be comfortable with killing? * Were you persuaded to support gun control as a consequence of school shootings by children? Have you considered that some or all of those children may have been “Manchurian candidates,” programmed for covert operations? Indeed, the history of using children for assassination and covert operations is centuries old, including by American military and intelligence agencies. * When you moved your mother from a government subsidized rent-controlled apartment to government assisted living managed by the same property manager and real estate investment fund, was it because her mental acuity had deteriorated simply as part of the aging process? Or was it due to poisons or electromagnetic weaponry arranged by the landlord with the help of a private security firm to increase profitability per elderly tenant by engineering an accelerated deterioration?

Mind control is one of those topics often excluded from polite conversation. It requires us to face the fact that we and the people we love are being manipulated by something that our current education and social status - and even local law enforcement - may not be able to protect us from. It is a topic that can be overwhelming, even terrifying.

Yet the first step toward protecting ourselves is to be able to understand our environment, make clear decisions clearly, and act in our own best interest - even organize with others to do so.

As unnerving as learning about it can be, mind control is a topic essential to your health and safety. To protect yourself, you must protect your mind and maintain an accurate map of the world around you – including the ways that others are trying to use your mind as a weapon against you.

The good news is that learning about mind control also involves discovering your mind’s extraordinary power - a positive step towards using your mental powers to serve your purpose and act in the highest and best interest of all concerned.

On this week’s Solari Report, I will present a specially prepared briefing, “A Layman’s Guide to Mind Control.” I will introduce the topic of mind control and its various aspects, review its history, and discuss current applications that create risk to you and your assets. I will review the best books, documentaries and movies - which I have distilled from hundreds of sources - to help you explore and master this important topic. A recommended list will be posted at your subscriber cart along with the audio.

In Let’s Go to the Movies, I will review two movies about mind control - Telefon and The Manchurian Candidate (2004).http://www.youtube.com/watch?v=-Qg0w8qbBQohttp://www.youtube.com/watch?v=eyxmz0BrT5g

I will start with a review of the extraordinary financial and geopolitical developments over the last two weeks in Money & Markets and answer questions in Ask Catherine.

Title: Haiti Oil
Post by: Luck on February 04, 2010, 07:06:32 pm

A reason for recent U.S. and others' involvement in Haiti may be discovery of oil there.http://www.globalresearch.ca/index.php?context=va&aid=17287

* New Mexico House Votes 65-0 To Move State's Money To Credit Unions, Community Banks (moving it from Bank of America apparently)http://www.huffingtonpost.com/2010/02/09/new-mexico-house-votes-65_n_456043.html* That's a good thing, isn't it? Huffington apparently has been promoting the idea.

Why would an economic crash automatically result in hyperinflation?'Crashes' generally denote periods of high deflation.

Don't want to associate with Larouche, but as confidence in the US fades, less people will be willing to buy its debt. More and more of the financing will have to come from printing money. There are many trillions of unfunded liabilities on the horizon. The government can either default on its promises or print up the money. This large increase in the money supply has disastrous effects on the economy. It wipes out saving, forces people to think in the very, very short term, creates a huge amount of uncertainty, etc.

* A friend of mine said the govt has recently started printing $5 trillion, but it's going to the big banks or something like that, instead of directly into circulation, so he said it may not be very inflationary near-term.

Economics can indeed be a nightmare to understand. This article from The Daily Bell (a Libertarian publication) may shed some light on the Austrian School of Economics' point of view. Some of the comments at the bottom of the article are quite informative.

Neither political party will pay much attention to this - probably at their own risk as the financially literate public is just beginning to understand and getting angrier.

There is also a louder call by some to have people understand that they may need to stock-up on beans and bullets as the existing financial system may collapse (intentional or otherwise.)http://www.thedailybell.com/2000/Antal-Fekete-Impeach--Bernanke-An-open-letter-to-Congressman-Ron-Paul-of-Texas-.html (http://www.thedailybell.com/2000/Antal-Fekete-Impeach--Bernanke-An-open-letter-to-Congressman-Ron-Paul-of-Texas-.html)

When it comes to the health and welfare of a nation, there is no economic policy that is more important than job creation. And yet decades of experience, in nations across the globe, provide ample evidence that while the private sector plays an important role, it cannot by itself provide employment for all who want to work.

There is a way to do that: The government could serve as the “employer of last resort” under a job guarantee program modeled on the WPA (the Works Progress Administration, in existence from 1935 to 1943 after being renamed the Work Projects Administration in 1939) and the CCC (Civilian Conservation Corps, 1933-1942). The program would offer a job to any American who was ready and willing to work at the federal minimum wage, plus legislated benefits. No time limits. No means testing. No minimum education or skill requirements.

The program would operate like a buffer stock, absorbing and releasing workers during the economy’s natural boom-and-bust cycles. In a boom, employers would recruit workers out of the program; in a slump the safety net would allow those who had lost their jobs to continue to work to preserve good habits, making them easier to re-employ when activity picked up. The program would also take those whose education, training or job experience was initially inadequate to obtain work outside the program, enhancing their employability through on-the-job training. Work records would be maintained for all program participants and would be available for potential employers. Unemployment offices could be converted to employment offices, to match workers with jobs in the program, and to help private and public employers recruit workers.

Funding for the job guarantee program must come from the federal government—and the wage should be periodically adjusted to reflect changes in the cost of living and to allow workers to share in rising national productivity so that real living standards would rise—but the administration and operation of the program should be decentralized to the state and local level. Registered not-for-profit organizations could propose projects for approval by responsible offices designated within each of the states and U.S. territories as well as the District of Columbia. Then the proposals should be submitted to the federal office for final approval and funding. To ensure transparency and accountability, the Labor Department should maintain a website providing details on all projects submitted, all projects approved and all projects started.

To avoid simple “make-work” employment, project proposals could be evaluated on the following criteria: (a) value to the community; (b) value to the participants; (c) likelihood of successful implementation of project; (d) contribution to preparing workers for employment outside the program.

The program would take workers as they were and where they were, with jobs designed so that they could be performed by workers with the education and training they already had, but it would strive to improve the education and skills of all workers as they participated in the program. Proposals would come from every community in America, to employ workers in every community. Project proposals should include provisions for part-time work and other flexible arrangements for workers who need them, including but not restricted to flexible arrangements for parents of young children.

In truth, the $300 billion the president might propose Thursday is more than enough to jump-start our economy if it is really targeted to job creation. We can estimate the total program cost at $20,000 per worker, times 15 million workers. That adds up to a $300 billion gross cost, less savings on unemployment compensation (roughly $150 billion), welfare and food stamps, as well as the social cost of depression, divorce, abuse and crime. A direct job creation program modeled on the New Deal’s WPA could create 15 million jobs for less than $300 billion net spending, while also providing the infrastructure and public services required to bring our nation into the 21st century.

And because the job guarantee is designed not to compete with other employment options, the program would not result in the bidding up of wages (and prices) as workers were absorbed into the buffer stock. This is because the job guarantee program would hire only those that the market was not yet ready to employ. Because the program would not intensity competition for workers, it would not lead to wage-push inflation. It would, however, help to stabilize output and employment by establishing a floor on wages.

The program should be permanent, offering a good job at a basic wage to anyone who wants to work. With recovery, the number of jobs required in the program would quickly shrink, as the private sector would ramp up hiring as sales to consumers rise.

By keeping the program in place even once the economy recovered, we’d ensure continuous full employment, with the job program acting as a “buffer stock” that absorbed workers laid off when the private sector contracted and as an employment recruitment pool when private sector hiring resumed. In this way, full employment is maintained through the thick and thin of the business cycle.

Only jobs will create the infrastructure we need to compete in the 21st century. Further, Americans have never embraced welfare. For better or worse, our nation has always preferred a more libertarian path: self-help, personal responsibility, individual initiative. As a result, our welfare programs have always been stingy, temporary and purposely demeaning. They are not designed to reduce insecurity—while they relieve the worst of the suffering, those receiving handouts are supposed to quickly get back into the workforce, to pull themselves up by their own bootstraps. But they cannot do that when the nation is 20 million jobs short.

And we cannot restore the security needed to turn around expectations, to get the sales the private sector needs, with anything less than a nationwide universal jobs program.

A $450 billion “investment” in a direct jobs program would be the best way to prove that President Obama is committed to resolving the jobs crisis.

L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City. Stephanie Kelton is an associate professor at the University of Missouri-Kansas City and a research scholar at the Levy Economics Institute in New York.

There are two mainstream market assumptions that, in my mind, prevail over all others. The continuing function of the Dow, the sustained flow of capital into and out of the banking sector, and the full force spending of the federal government are ALL entirely dependent on the lifespan of these dual illusions; one, that the U.S. Dollar is a legitimate safe haven investment and will remain so indefinitely, and two, that China, like many other developing nations, will continue to prop up the strength of the dollar indefinitely because it is “in their best interest”. In the dimly lit bowels of Wall Street such ideas are so entrenched and pervasive, to question their validity is almost sacrilegious. Only after the recent S&P downgrade of America’s AAA credit rating did the impossible become thinkable to some MSM analysts, though a considerable portion of the day-trading herd continue to roll onward, while the time bomb strapped to the ass end of their financial house is ticking away.

The debate over the health and longevity of the dollar comes down to one very simple and undeniable root pillar of economics; supply and demand. The supply of dollars throughout the financial systems of numerous countries is undoubtedly overwhelming. In fact, the private Federal Reserve has been quite careful in maintaining a veil of secrecy over the full extent of dollar saturation in foreign markets in order to hide the sheer volume of greenback devaluation and inflation they have created. If for some reason the reserves of dollars held overseas by investors and creditors were to come flooding back into the U.S., we would see a hyperinflationary spiral more destructive than any in recorded history. As the supply of dollars around the globe increases exponentially, so too must foreign demand, otherwise, the debt machine short-circuits, and newly impoverished Americans will be using Ben Franklins for sod in their adobe huts. As I will show, demand for dollars is not increasing to match supply, but is indeed stalled, ready to crumble.

China, being the second largest holder of U.S. debt next to the Fed, and the number one holder of dollars within their forex reserves, has always been the key to gauging the progression of the global economic collapse now in progress. If you want to know what’s going to happen tomorrow, watch what China does today.

Back in 2005, China began a low profile program to issue government debt denominated in the Yuan, called Yuan bonds, or “Panda Bonds”. This move was almost entirely ignored by establishment economists. They should have realized then that China was moving to strengthen the Yuan, expand its use in other markets, and recondition their economic structure away from export dependency and towards consumerism (as they have done with the establishment of the ASEAN trading bloc). Of course, in the MSM at that time, there was no derivatives bubble, no credit crisis, no debt implosion. America was on cloud nine. China, through inside knowledge, or perhaps a crystal ball, knew exactly what was about to happen, and insulated itself accordingly by generating distance between its system and the soon to derail retail based society of the U.S. This dynamic has not changed since the 2008 bubble burst, and Chinese activity is still the ultimate litmus test for economic volatility.

Today, there is widespread confusion in markets over the direction of America’s financial future. In the wake of the credit downgrade, most investors unaware of the bigger picture are desperately clinging to any and every piece of news no matter how trivial, every rumor from the Fed, and every announcement from the government no matter how empty. China’s economic news feeds have been tightly regulated and filtered, even more so than usual (which is cause for concern, in my opinion), while distractions in Europe abound. Let’s take a step by step journey through these issues, and see if we can’t produce some clarity…

U.S. versus EU: A Game Of Hot Potato…To The Death?

The theatrical seesaw between the U.S. and Europe is not only becoming obvious to the most narrow of economic analysts, it is also becoming kind of boring. The entire ordeal has been subversively exploited as a false example of systemic “contagion”, and with purpose; global banks need to convince average Americans and average Europeans that destabilization in one portion of the world will automatically lead to destabilization everywhere. This concept is true only so far as forced globalization and centralization have made it true. That said, the charade has been somewhat effective in conditioning the populace with ideas of collectivist survival. In other words, we are being trained to take fiscal responsibility for countries outside of our sovereign national boundaries as if we are morally tied to every penny they have or do not have (global socialism/feudalism – here we come!). This process is culminating in worldwide harmonization through fear as well as guilt.

What we are witnessing is NOT contagion. Instead, we are seeing multiple and mostly separate collapses activated simultaneously. Each nation suffering dire straights in Europe is doing so because of its own particular financial problems, not the problems of other countries nearby, and certainly not those of countries on the other side of the world. Contagion arguments are only applicable to those economies overly dependent on exports, yet, China has already shown (at least in the case of the U.S.) that such dangers can be controlled by minimizing exposure to the poisoned portions of the system and reverting to more internalized wealth creation.

Treasury Secretary Timothy Geithner and the heads of World Bank and IMF have perpetuated the lie of contagion between the U.S. and the EU primarily to service the progress of globalization, but also to hide the inflationary effects of dollar devaluation. While the greatest threats are stacked squarely against America’s economy and the dollar, somehow we have been led to focus on the comparatively less explosive drama in the EU. U.S. dollars, as well as Chinese funds, are flooding into Europe to support the region, while investment in the U.S. and its debt weakens and disappears. In the meantime, a weaker Euro makes the dollar look more attractive (at least on paper), but in reality, both currencies are on the path to bloody hari-kari.

How much longer can this game of hot potato go on? Again, China decides. Eventually, China is going to have to choose which currency to support; the dollar or the euro. Supporting both is simply not an option, especially when the chance of collapse in both currencies is so high. So far, the most logical path has been the euro. While the EU may suffer an astonishing breakdown, we must take into account that our own Treasury and central bank have seen fit to throw trillions of dollars into propping up Europe (with even more on the way):

With so much inflation and devaluation being thrust upon the dollar in the name of saving the EU, China’s move towards a stronger economic relationship with Europe at the expense of the U.S. is a no-brainer:

China has been tip-toeing towards this for years, and has openly admitted on numerous occasions that they plan to institute a break from U.S. debt and the dollar in due course. Anyone who continues to argue that a Chinese decoupling from America’s economy is impossible at this point is truly beyond hope. Though increasingly more rare, news on China’s push to drop the U.S. still leaks out. Recently, a top advisor to China’s central bank let slip that a plan is in place to begin “liquidating” (yes, they said liquidate) their U.S. Treasury bonds as soon as possible, and reposition national investments into more physical assets:

But let’s step back for a moment and pretend China hasn’t told us exactly what it is going to do time and time again. Instead, let’s look at the fundamentals.

The primary concern in China right now is inflation. Because China does not yet have the ability to export its fiat to other markets the way the U.S. does, its own liquidity injections in the face of the credit crisis have led to severe price increases. In August alone, overall inflation was rated at 6.2% (always double government produced numbers to get true inflation). Food prices jumped 13.4%, while meat and poultry jumped 29.3%. Because these numbers are around 1% lower than in previous months, the Chinese government has prematurely proclaimed a “cooling period”:

With harsh inflation continuing unabated, eventually, the Asian nation will be forced to enact abrupt policies. This will likely take the form of a strong Yuan valuation, or a “floating” of the Yuan. A sizable increase in the value of the Chinese currency is the ONLY way that the government will be able to combat rising prices. By increasing the buying power of its citizens, the government allows them to keep pace with rising prices, and eases the tension within the populace which could otherwise lead to civil unrest. For China to ensure that a floating of the Yuan will lead to a much higher value, their forex and treasury holdings will have to fall. Period.

A dumping of the dollar will give the Chinese room to breath, and this space will be needed very soon. The debt ceiling deal made by Congress in the aftermath of the credit downgrade left the rest of the world unimpressed. While the MSM tries to make us forget that this event ever occurred, most foreign investors have not. Markets are anxiously awaiting an announcement from the Fed for further liquidity injections. If this announcement is not made after meetings next week, then it will certainly be made before the end of the year. Ironically, the same quantitative easing that investors are clamoring for today is liable to become the final signal for China to cut its losses and separate from U.S. securities completely. China has been positioned for many months now to take such measures…

Lights Out…

Delusions of Chinese dependency on the U.S consumer still abound, and those who suggest a catastrophic dump of U.S. debt and dollars in the near term are liable to hear the same ignorant talking points we have heard all along:

“The Chinese are better off with us than without us…”

“China needs export dollars from the U.S. to survive…”

“China isn’t equipped to produce goods without U.S. technological savvy…”

“America could simply revert back to industry and production and teach the Chinese a lesson…”

“The U.S. could default on its debts to China and simply walk away…”

“The whole situation is China’s fault because of their artificial devaluation of the Yuan over the decades…”

And on and on it goes. Though I have deconstructed these arguments more instances than I can count in the past, I feel it my duty to at least quickly address them one more time:

U.S. consumption of all goods, not just Chinese goods, has fallen off a cliff since 2008 and is unlikely to recover anytime soon. China has done quite well despite this fall in exports considering the circumstances. With the institution of ASEAN, they barely need us at all.

China is well equipped to produce technological goods without U.S. help, and if Japan is inducted into ASEAN (as I believe they soon will be), they will be even more capable.

America will NOT be able to revert back to an industrial based economy before a dollar collapse escalates to fruition. It took decades to dismantle U.S. industry and ship it overseas. Reeducating a 70% service based society to function in an industrial system, not to mention resurrecting the factory infrastructure necessary to support the nation, would likely take decades to accomplish.

If the U.S. deliberately defaults on debt to China, the global reputation of the dollar would implode, and its world reserve status would be irrevocably lost. We won’t be teaching anyone a “lesson” then.

Yes, China currently manipulates its currency down, but then again, so does the U.S. though quantitative easing. Both sides are dirty. Taking sides in this farce is pure stupidity…

Now that all that has been cleared up (again), the primary point becomes rather direct; the reason it is difficult to predict an exact time frame for an American collapse is because all the pieces are in place to trigger an event right now! There are, of course, stress points within the system that set a time limit, even on global banks and China, but a full spectrum catastrophe is not only a concern for some distant future. Every element needed for the so called “perfect storm” is ever present and ready to ignite at a moments notice. The destructive potential coming from China alone is undeniable. Everyday that the spark is subdued should be treated as a gift, an extra 24 hours of education and preparation. This is how close we are to the edge. It is not for us to be alarmed, but to be ready, and ever aware.

CAFR1 IN REPLY TO: The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System

CAFR1 REPLY: Understanding the puzzle of derivatives

The Commodity Futures market is one of the largest derivative trading arenas with many commodities; currencies; precious metals; and energy products listed - Futures Market

It all revolves around "Price" and "Time". You will notice that on all traded contracts there are time periods listed noted by contract months going out up to three-years out.

Whatever the price is today (minute by minute as the contracts are traded) someone can buy or sell a contract with a 1% to 3% of the value of the contract in their account (buying or selling on margin)

Most from the public are psychologically conditioned that they have to buy first and then sell to make a profit. In derivatives that is 100% incorrect. You are making a "time" bet for higher or lower prices. If you think the value is going down, you sell a contract. If you think it is going up you buy a contract.

With the markets now primarily being traded electronically, when a buy or sell order is entered and at your price your fill usually is instant. This means you can jump in and out at your choice. If you choose it could be 10 minutes, an hour, a day, a week, or longer that you hold your position. The following is an example of the best profit in the shortest period I personally made:

It was back in 1981 and on on day when I was watching silver towards the close, it looked like it was very top heavy after moving up a few dollars over a couple of weeks. I said to myself: "I think it is going to collapse in the last few minutes before the close. It was 4-minutes to the close and I at that time having an account balance of about $32,000 slapped in two orders; (SELL) 35 DEC SILVERS at Market, and (BUY) 35 DEC SILVERS (Market on Close)

Well, got filled on the 35 sell orders in about 5 seconds and in the next 4-minutes silver collapsed by 42c where my Market on close orders were filled. No more 35 derivative contracts held, just accounting of the instant CASH collected on the trade.Here is the accounting: 42c X 35 = $14.7 X $5,000 ($1 value of a silver contract move) = $73,500 + $32,000 (my account balance before the trade)= $106,500 (account balance after the trade) or not bad after a 4-minute derivatives trade. Now those that had the "other side" of the trade got burnt. The commissions I was paying at that time was about $15 per contract X 35 contracts traded = $525 that went to the House and exchange that "cleared" the trade.

Most commodity contracts have active participation in the front months but the further the time goes out participation dries up and thus no liquidity to trade those contracts.

For every contract being that it is a bet on "time" will reach its expiration and delivery day. When that happens all speculators are out and those wishing to take or make delivery stay in to the last day and then the exchanges match up the "real" buyers and sellers to each other on the outstanding contracts where physical delivery of the underling commodity is made.

Come that last day the volume of contracts held dries up to usually less that 1% of what it was a few days earlier (over 99% were speculators and less than 1% actually wanted to take or make delivery)

The 600 trillion notional value is: the value of all the bets.

EXAMPLE: a 30 Year Bond on the commodity futures market has a $100,000 face value of the bet and the margin requirement to hold it over night is $2,500 and day trading margin can be $1,000. As of today the "Net" contract volume is at about 289,000 contracts. So based on notional face value that is 289,000 X $100,000 = $89 billion-dollars but the "margin deposits being used is substantially less.

So that 600 trillion is the "full contract value" of all contracts being traded. That 1.5 quadrillion is when you take into account both sides of the contract. For every buyer holding a contract there is a seller holding the other side. So when counting each side 600 X 600 = 1.2 quadrillion.

Here is the "Bottom Line":

With 99% speculators, yes it is a casino. But "who" are the primary players that are liquidating from others tens of billions of dollars a day from the trading activity (remember when the trade is closed in 5-minutes or 5-months it is all a "cash" accounting for the winner's and loser's account balances)

Well, those from the general public that tries to play this game, they get their account balances decimated to the tune of 98% of those players that participated in very short periods of time. (bought on highs; sold on lows; got stopped out or force liquidated for not having the proper margin after being depleted from quick adverse market moves)

So who are that 2% factor that takes everyone's money to the tune of over a few trillion dollars a year (some times in a month as happened at the end of 2008) ?

The answer may surprise you. Now the House and the Exchanges get a small cut from each side. There are a few magnates on the inside track that also make good money: But the "Primary" profiteer for several decades now are: Institutional Government Fund Management.

They in so many words all subscribe to the same News Services and consulting groups. They have the fund resources in trillion dollar collective totals managed from around the globe. They can act in loose concert and roll the markets up; down; sideways and do so as fast or as slow as they wish locking in the CASH (wealth transfer) on their trading activity.

The end of 2008 showed how fast they could move the markets by exercising their multi-trillion dollar trading accounts and massive contract volume they can move in and out.

At the end of 2008 in a month and a half about 25 to 30 trillion-dollars was "sucked" right out of players accounts "globally" that were on the "wrong sides" of the trades. Now some government investment funds where they were on the outside track got burnt. The primary government institutional global accounts that "were" on the inside track made a killing of several trillion dollars.

Now here is the definition of arrogance:

Government (USA) global institutional funds now after having liquidating trillions out of the playing loser's accounts at the end of 2008, which caused massive defaults from the loser's who ended up with severe deficit account balances, now uses a trillion here and a trillion there of taxpayer revenue to shore-up their own casino and friendly corporate interests they were vested in.

Is there a "bubble" in the derivatives market?

As of 2009, Oh yes.. You can not suck so many trillions out of others accounts at the end of 2008 without destabilizing the playing field. Commodity futures contracts back then were settled after weeding out defaults so back to normal there. I note the definition of normal is those government institutional accounts rolling the market up and down, quick and slow; as they liquidate that 98% factions cash on the trades.

The danger lies in those "Mortgage Interest Rate Swaps" where there is a substantially reduced value of the underling commodity and in some cases the contract instrument traded had no underling commodity to back it up at all (real-estate home and commercial properties)

Here the balancing act is precarious to say the least. Offsetting those contract instruments to balance out with "real" underling value "market to market" is a nightmare for the players running the show.

Those trillions in bailouts to the global banks and financial institutions have primarily gone to that end.

Are they getting closer to balancing the books? Yes.

Are they there yet? No, they are about 60% there and it will take more time to balance the remainder and then the beat goes on with a closer eye overseeing the balance sheets.

[Michael Hudson agrees with libertarians about taxes being bad for the economy. He talks below about one kind of taxes that are good for the economy, which sounds contradictory at first, until you realize that what he's calling taxes here is not really taxes, but voluntary fees in exchange for a service. It's similar to toll road fees, court fees etc. In this case, the service is the privilege to use public property. - Luck]

naked capitalism- Friday, January 4, 2013Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part IV-- Why Financial and Tax Reform Should Go Together- By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College.- His latest book is “The Bubble and Beyond.”- Taxes pay for the cost of government by withdrawing income from the parties being taxed.- From Adam Smith through John Stuart Mill to the Progressive Era, general agreement emerged that the most appropriate taxes should not fall on labor, capital or on sales of basic consumer needs.- Such taxes raise the break-even cost of employing labor.- In today’s world, FICA wage withholding for Social Security raises the price that employers must pay their work force to maintain living standards and buy the products they produce.- However, these economists singled out one kind of tax that does not increase prices: taxes on the land’s rental value, natural resource rents and monopoly rents.- [- Actually, that‘s not a tax, imo; it‘s a government fee, just like postal fees, toll road fees, incorporation fees, court fees etc.]- [- No taxes are justified, because tax is theft; fees are voluntary equal exchanges.]- [- All land, natural resources and governing power belong to all of the people.]- [- The people have the right to decide via their true representatives who may use natural resources and power and what fees they should pay for them.]- [- When any individual or group uses such resources or power, the people deserve to be compensated] ...- Land is the economy’s largest asset.- A site’s rental value is set by market conditions – what people pay for being able to live in a good location.- People pay more to live in prestigious and convenient neighborhoods.- They pay more if there is local investment in roads and public transportation, and if there are parks, museums and cultural centers nearby, or nice shopping districts.- People also pay more as the economy grows more prosperous, because one of the first things they desire is status, and in today’s world this is defined largely by where one lives.- Landlords do not create this site value.- But speculators may seek to ride the wave by buying property on credit, where the rate of land-price gain exceeds the interest rate.- This “capital” gain is the proverbial free lunch.- It is created by public investment, by the general level of prosperity, and by the terms on which banks extend credit.- In a nutshell, a property is worth whatever a bank will lend, because that is the price that new buyers will be able to pay for it.- This logic was more familiar to the public a century ago than it is today.- A property tax [fee] to collect this “free lunch” rent is paid out of the rent [to the government].- This leaves less to be capitalized [i.e. used by resource exploiters to put] into new interest-bearing loans – while freeing the government from having to tax labor and industrial capital.- So this tax [fee] not only is “less bad” than others; it is actively desirable to reduce the [government‘s] debt overhead [overhead means costs of operation?].- Rent levels [paid by consumers?] are not affected, but the government collects the rent instead of the property owner or, at one remove, the mortgage banker who [otherwise?] turns this rent into a flow of interest by advancing the purchase price of rent-yielding properties to new buyers.- Real estate was the major source of rising net worth and wealth for America’s middle class for over sixty years, from the return to peace in 1945 until the 2008 financial collapse.- Rising property prices were fueled largely by banks providing mortgage credit on easier terms.- But by 2008 these terms had reached their limit.- Interest rates were seemingly as low as they could go.- So were down payments (zero down payment) and amortization rates (zero, with interest-only loans) and property values were becoming fictitious as a result of a tidal wave of fraud by the banking system’s property appraisers, while the income statements of borrowers also [were] becoming fictitious (“liars’ loans,” with the main liars being the mortgage writers).- If the rise in real estate prices (mainly site values) had been taxed [i.e. charged reasonable fees], there would have been no financial overgrowth, because this price-gain would have been collected as the tax base [government revenues or assets].- The government would not have needed to tax labor either via income tax, FICA wage withholding or consumer sales.- And taken in conjunction with the government’s money-creating power, there would have been little need for public debt to grow.- Taxing [charging fees for] rent extraction [selling raw material resources] privileges thus would minimize [end] debt levels and taxes on the 99%.- The next leading form of economic rent is taken by oil, gas and mining companies from the mineral deposits created by nature, as well as by owners or leasers of forests and other natural resources [which in] Classical economics [was called] “economic rent.”- It is not profit on capital investment, because nature has provided the resource, not human labor or expenditure [of] capital – except for tangible capital investment in the buildings erected on the land, saws to cut down trees, earth-moving equipment to do the mining, and so forth.- The basic contrast is between a productive industrial economy and a rent-extracting one in which special privileges, monopoly pricing and economic rents divert spending away from tangible capital investment and real output [production].- Classical economists defined economic rent generically as “empty” pricing in excess of technologically necessary costs of production.- This would include payments to pharmaceutical companies, health management organizations (HMOs) and monopolies [but excluding their] cost of doing business.- Much like paying debt service, such economic rent siphons market revenue away from tangible production and consumption.- It was to demonstrate this that Francois Quesnay developed the first national income statistics, the Tableau Économique.- His aim was to show that the landed aristocracy’s rental rake-offs should form the basis for taxation rather than the excise taxes that were burdening industry and making it uncompetitive.

(Cont.)- But for the past hundred years, commercial banks have opposed property taxes, because taxing the land’s rent would mean less left over to pay interest [to the banks].- Some 80 percent of bank loans are for real estate, mainly to capitalize [profit from] the rental value left untaxed.- A property and wealth tax [make that fee, not tax] would reduce this market – along with the government’s need to borrow, and hence to pay interest to bondholders.- And without a fiscal squeeze there would have been less of an opportunity for the financial sector to push to privatize [give special interests ownership of] what remains of the public domain.- Today’s central financial problem is that the banking system lends mainly for rent extraction opportunities rather than for tangible capital investment and economic growth to raise living standards.- To maximize rent, it has lobbied to untax [i.e. give away to them] land and natural resources.- At issue in today’s tax and financial crisis is thus whether the world is going to have an economy based on progressive industrial democracy or a financialized and polarizing rent-extracting society.- - The Ideological Crisis Underlying Today’s Tax and Financial Policy- From antiquity and for thousands of years, land, natural resources and monopolies, seaports and roads were kept in the public domain.- In more recent times railroads, subway lines, airlines, and gas and electric utilities were made public.- The aim was to provide their basic services at cost or at subsidized prices rather than letting them be privatized into rent-extracting opportunities.- The Progressive Era capped this transition to a more equitable economy by enacting progressive income and wealth taxes [i.e. fees].- Economies were liberating themselves from the special privileges that European feudalism and colonialism had granted to favored insiders.- The aim of ending these privileges – or taxing away economic rent where it occurs naturally, as in the land’s site value and natural resource rent – was to lower the costs of living and doing business.- This was expected to make progressive economies more competitive, obliging other countries to follow suit or be rendered obsolete.- The era of what was considered to be socialism in one form or another seemed to be at hand – rising role of the public sector as part and parcel of the evolution of technology and prosperity.- But the landowning and financial classes fought back, seeking to expunge the central policy conclusion of classical economics: the doctrine that free-lunch economic rent should serve as the tax base for economies seeking to be most efficient and fair.- Imbued with academic legitimacy by the University of Chicago (which Upton Sinclair aptly named the University of Standard Oil) the new post-classical economics has adopted Milton Friedman’s motto: “There Is No Such Thing As A Free Lunch” (TINSTAAFL).- If it is not seen, after all, it has less likelihood of being taxed.- The political problem faced by rentiers – the “idle rich” siphoning off most of the economy’s gains for themselves – is to convince voters to agree that labor and consumers should be taxed rather than the financial gains of the wealthiest 1%.- How long can they defer people from seeing that making interest tax-exempt pushes the government’s budget further into deficit?- To free financial wealth and asset-price gains from taxes – while blocking the government from financing its deficits by its own public option for money creation – the academics sponsored by financial lobbyists hijacked monetary theory, fiscal policy and economic theory in general.- On seeming grounds of efficiency they claimed that government no longer should regulate Wall Street and its corporate clients.- Instead of criticizing rent seeking as in earlier centuries, they depicted government as an oppressive Leviathan for using its power to protect markets from monopolies, crooked drug companies, health insurance companies and predatory finance.- This idea that a “free market” is one free for Wall Street to act without regulation can be popularized only by censoring the history of economic thought.- It would not do for people to read what Adam Smith and subsequent economists actually taught about rent, taxes and the need for regulation or public ownership.- Academic economics is turned into an Orwellian exercise in doublethink, designed to convince the population that the bottom 99% should pay taxes rather than the 1% that obtain most interest, dividends and capital gains.- By denying that a free lunch exists, and by confusing the relationship between money and taxes, they have turned the economics discipline and much political discourse into a lobbying effort for the 1%.- Lobbyists for the 1% frame the fiscal question in terms of “How can we make the 99% pay for their own social programs?” The implicit follow-up is, “so that we (the 1%) don’t have to pay?” This is how the Social Security system came to be “funded” and then “underfunded.” The most regressive tax of all is the FICA payroll tax at 15.3% of wages up to about $105,000.- Above that, the rich don’t have to contribute.- This payroll tax exceeds the income tax paid by many blue-collar families.- The pretense is that not taxing these free lunchers will make economies more competitive and pull them out of depression.- The reality is the opposite: Instead of taxing the wealthy on their free lunch, the tax burden raises the cost of living and doing business.- This is a major reason why the U.S. economy is being de-industrialized today.- The key question is what the 1% do with their revenue “freed” from taxes.- The answer is that they lend it out to indebt the 99%.- This polarizes the economy between creditors and debtors.- Over the past generation the wealthiest 1% have rewritten the tax laws to a point where they now receive an estimated 66% – two thirds – of all returns to wealth (interest, dividends, rents and capital gains), and a reported 93% of all income gains since the Wall Street bailout of September 2008.- They have used this money to finance the election campaigns of politicians committed to shifting taxes onto the 99%.- They also have bought control of the major news media that shape peoples’ understanding of what is happening.- And as Thorstein Veblen described nearly a century ago, businessmen have become the heads [of] most universities and directed their curriculum along “business friendly” lines.- The clearest way to analyze any financial system is to ask Who/Whom.- That is because financial systems are basically a set of debts owed to creditors.- In today’s neo-rentier economy the bottom 99% (labor and consumers) owe the 1% (bondholders, stockholders and property owners).- Corporate business and government bodies also are indebted to this 1%.- The degree of financial polarization has sharply accelerated as the 1% are making their move to indebt the 99% – along with industry, state, local and federal government – to the point where the entire economic surplus is owed as debt service.- The aim is to monopolize the economy, above all the money-creating privilege of supplying the credit that the economy needs to grow and transact business, enabling them to extract interest and other fees for this privilege.- The top 1% have nearly succeeded in siphoning off the entire surplus for themselves, receiving 93% of U.S. income growth since September 2008.

(Cont.)- Their control over the political process has enabled them to use each new financial crisis to strengthen their position by forcing companies, states and localities to relinquish property to creditors and financial investors.- So after monopolizing the economic surplus, they now are seeking to transfer to themselves the economic infrastructure, land and natural resources, and any other asset on which a rent-extracting tollbooth can be placed.- The situation is akin to that of medieval Europe in the wake of the Nordic invasions.- The supra-national force of Rome in feudal times is now situated in Washington, with Christianity replaced by the Washington Consensus wielded via the IMF, World Bank, WTO and its satellite institutions such as the European Central Bank, backed by the moral and ideological role [of] academic economists rather than the Church.- And on the new financial battlefield, Wall Street underwriters have used the crisis as an opportunity to press for privatization.- Chicago’s strong Democratic political machine sold rights to install parking meters on its sidewalks, and has tried to turn its public roads into privatized toll roads.- And the city’s Mayor Rahm Emanuel has used privatization of its airport services to break labor unionization, Thatcher-style.- The class war is back in business, with financial tactics playing a leading role barely anticipated a century ago.- This monopolization of property is what Europe’s medieval military conquests sought to achieve, and what its colonization of foreign continents replicated.- But whereas it achieved this originally by military conquest of the land, today’s 1% do it ... by financializing the economy (although the military arm of force is not absent, to be sure, as the world saw in Chile after 1973).- - The Financial Quandary Confronting Us- The economy’s debt overhead has grown so large that not everyone can be paid.- This poses the ... age-old question of Who/Whom.- The answer almost always is that big fish eat little fish.- Big banks (too big to fail) are eating little banks, while the 1% try to take the lion’s share for themselves by annulling public and corporate debts owed to the 99%.- Their plan is to downgrade Social Security and Medicare savings to “entitlements,” as if it is a matter of sound fiscal choice not to pay low-income recipients, in order to reward rentiers at the top, who have re-christened themselves “job creators.”- The problem is not Social Security, which can be paid out of normal tax revenue, as in Germany’s pay-as-you-go system.- This fiscal problem has been falsely depicted as a financial problem, as if one needs to save in advance by a special tax on the 99%.- The real pension cliff is with corporate, state and local pension plans, which are being underfunded and looted by financial managers.- The shortfall is getting worse as the downturn reduces local tax revenues, leaving states and cities unable to fund their programs, to invest in new public infrastructure, or even to maintain and repair existing investments.- Public transportation is suffering in particular – raising user fees to riders in order to pay bondholders.- But it is mainly retirees who are being told to sacrifice.- (The sanctimonious verb is to “share” in the sacrifice, although this evidently does not mean the 1% [should share in the sacrifice too].)- The bank lobby suggests that the economy borrow its way out of debt.- Their proposal to “stabilize” the financial system is for the government to ... do for the banks what it has not been willing to do for recipients of Social Security and Medicare, or for states and localities no longer receiving revenue sharing, or for homeowners in negative equity suffering from exploding interest rates even while bank borrowing costs from the Fed have plunged.- The government is to supply nearly free credit to the banks, to lend debtors enough – at the widest interest-rate markups in recent memory – to keep paying the debts that were run up before 2008.- The problem is that this set of policies will further destabilize the economy rather than alleviating today’s debt deflation.- What makes this a quandary is that the proposed moves to cure this instability will only make things worse.- The Fed’s prime directive is to keep interest rates low – to revive lending not to finance new business investment to produce more, but simply to inflate the asset prices that back the bank loans that constitute bank reserves.- However, if the Fed keeps interest rates low, there is no way that corporate, state and local pension plans can make the 8+% returns needed to pay their scheduled pensions.- But if the Fed lets interest rates rise, this will reduce the capitalization rate at which banks lend against current rental income and profits.- That will lower prices for real estate, corporate stocks and bonds, pushing the banks even deeper into negative equity.- So if the economy is saved, the banks cannot be.- This is why the Obama Administration has chosen to save the banks, not the economy.- Either way, the financial system cannot continue along its present path.- Only debt write-offs will “free” markets to resume spending on goods and services.- And only a shift of taxes onto rent-yielding property, finance and monopolies will save financialized prices from being loaded down with interest charges as banks lend to raise the economic overhead rather than for production and employment.- The solution for Social Security, Medicare and Medicaid is to de-financialize them, treating them like government programs for military spending, beachfront rebuilding and bank subsidies, paid out of current tax revenue and new government money creation, which is what central banks are supposed to facilitate, after all.- Governments shy away from confronting these lines of solution mainly because the financial sector has sponsored an economic tunnel vision that ignores the role of debt, money, tax philosophy, and the phenomena of economic rent and asset-price inflation that are the defining characteristics of our financialized age.- The focus of government policy is to save a financial system that cannot be saved more than temporarily.- The economy will shrink as a result of income being divert[ed] to pay credit card debt and mortgage debts.- Students without jobs will remain burdened with student debt (over $1 trillion), with the time-honored safety valve of bankruptcy closed off to them.- Many graduates are still living with their parents as marriages, and family formation (and hence, new house-buying) turn down.- Now that the debt build-up has run its course, the banking sector is left to put its hope in gambling on mathematical probabilities via hedge fund capitalism.- So Casino Capitalist has become the stage of finance capitalism following Pension Fund capitalism, and preceding the insolvency stage of austerity and neofeudal property seizures.- Austerity will deepen rather than cure the public budget deficit.- Unlike past centuries, this deficit is not being incurred to wage war, but to pay a financial system that has become predatory on the “real” economy of production and consumption.- The collapse of this system is what caused today’s budget deficit.- Instead of recognizing this, the Obama Administration is trying to make labor pay.- Pushing wage-earners over the “fiscal cliff” to make it pay the costs of Wall Street’s financial bailout can only shrink ... the domestic market more, destabilizing the economy by pushing [it] into a fatal combination of tax-ridden and debt-ridden fiscal and financial austerity.- What is held out as the technocratic hope of “deleveraging” means diverting yet more income to pay the financial sector rather than to resume economic growth and restore employment levels.- Yet the recent lesson of European experience is that despite austerity, debt has risen from 381% of GDP in mid-2007 to 417% in mid—2012.- That is what happens when economies shrink: debts mount up at [as?] arrears (and with stiff financial penalties).- Yet the aim of Obama Administration of Tim Geithner, Ben Bernanke, Erik Holder et al. seems to be to make America look like Europe, wracked by rising unemployment, falling markets and the related syndrome of adverse social and political consequences of financial warfare waged against labor, industry and government together.

Back in 2012, the major US banks settled a federal mortgage-fraud lawsuit for $95,000,000. The suit was filed by Lynn Szymoniak, a white-collar fraud specialist, whose own house had been fraudulently foreclosed-upon. When the feds settled with the banks, the evidence detailing the scope of their fraud was sealed, but as of last week, those docs are unsealed, and Szymoniak is shouting them from the hills. The banks precipitated the subprime crash by "securitizing" mortgages -- turning mortgages into bonds that could be sold to people looking for investment income -- and the securitization process involved transferring title for homes several times over. This title-transfer has a formal legal procedure, and in the absence of that procedure, no sale had taken place. See where this is going?

The banks screwed up the title transfers. A lot. They sold bonds backed by houses they didn't own. When it came time to foreclose on those homes, they realized that they didn't actually own them, and so they committed felony after felony, forging the necessary documentation. They stole houses, by the neighborhood-load, and got away with it. The $1B settlement sounded like a big deal, back when the evidence was sealed. Now that Szymoniak's gotten it into the public eye, it's clear that $1B was a tiny slap on the wrist: the banks stole trillions of dollars' worth of houses from you and people like you, paid less than one percent in fines, and got to keep the homes.

Now that it’s unsealed, Szymoniak, as the named plaintiff, can go forward and prove the case. Along with her legal team (which includes the law firm of Grant & Eisenhoffer, which has recovered more money under the False Claims Act than any firm in the country), Szymoniak can pursue discovery and go to trial against the rest of the named defendants, including HSBC, the Bank of New York Mellon, Deutsche Bank and US Bank.

The expenses of the case, previously borne by the government, now are borne by Szymoniak and her team, but the percentages of recovery funds are also higher. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.

It’s good that the case remains active, because the $95 million settlement was a pittance compared to the enormity of the crime. By the end of 2009, private mortgage-backed securities trusts held one-third of all residential mortgages in the U.S. That means that tens of millions of home mortgages worth trillions of dollars have no legitimate underlying owner that can establish the right to foreclose. This hasn’t stopped banks from foreclosing anyway with false documents, and they are often successful, a testament to the breakdown of law in the judicial system. But to this day, the resulting chaos in disentangling ownership harms homeowners trying to sell these properties, as well as those trying to purchase them. And it renders some properties impossible to sell.

To this day, banks foreclose on borrowers using fraudulent mortgage assignments, a legacy of failing to prosecute this conduct and instead letting banks pay a fine to settle it. This disappoints Szymoniak, who told Salon the owner of these loans is now essentially “whoever lies the most convincingly and whoever gets the benefit of doubt from the judge.” Szymoniak used her share of the settlement to start the Housing Justice Foundation, a non-profit that attempts to raise awareness of the continuing corruption of the nation’s courts and land title system.

October 1st, 2013Oath Keepers is Going “Operational” by Forming Special “Civilization Preservation” Teamshttp://oathkeepers.org/oath/2013/10/01/oath-keepers-is-going-operational-by-forming-special-civilization-preservation-teams/

Oath Keepers is instructing it’s 30,000 members nation-wide to form up special teams and sub-teams in each Oath Keepers chapter, at the town and county level, modeled loosely on the Special Forces “A Team” (Operational Detachment A ) model, and for a similar purpose: to be both a potential operational unit for community security and support during crisis, but also, as mission #1, to serve as training and leadership cadre, to assist in organizing neighborhood watches, organizing veterans halls to provide community civil defense, forming County Sheriff Posses, strengthening existing CERT, volunteer fire, search-and-rescue, reserve deputy systems, etc., and eventually to assist in forming and training town and county militias (established by official act of town and county elected representatives). We want our chapters to organize themselves as a working model that we can then take to other veterans organizations, such as the VFW, American Legion, Marine Corps League, etc. in each town and help them establish such teams within their already existing veterans halls. And likewise, to serve as a model and training cadre to help churches, neighborhood watches, and any other civic organization organize.

We are basing this on the Special Forces model, which has a twelve man “A team” of specially trained soldiers who are inserted into a community to train and lead that community in resistance to oppressive regimes (hence their motto: “De Oppresso Liber). SF’s primary mission is to teach, organize, and lead, rather than to directly fight. They can fight, of course, but they are most dangerous as a force-multiplier by helping an entire community to fight. We will do the same – be force multipliers to help prepare communities so they can preserve civilization by providing their own security, disaster relief, infrastructure preservation, emergency communications, strategic food reserve, and medical care.

...[Read more at link above.]

And so, you should not just be forming these teams within your local Oath Keepers chapter and helping local veterans halls do the same, but also within your own family and circle of friends, and within your own neighborhood (who’s on your buddy team, who’s on your fire team, who’s on your squad?). Start a neighborhood watch and then build a solid field team and a support team within your own neighborhood.

When the crap hits the fan, you need well-trained people around you, with complementary skills, who can help you get through. Like Kevin Reeve of Onpoint Tactical says: “training trumps gear. And community trumps both training and gear.” You can’t know it all, or do it all, and you have to sleep sometime. So build a team, build community, and preserve civilization.

It starts with you, your family, your small circle of most trusted friends, then your neighborhood, your church, your veterans halls in your town, the Sheriff’s posse, the local search and rescue, volunteer fire, etc., and then out to your county and state.

WHY WE ARE DOING THIS:

In addition to this being part of our mission anyway, we feel like we are flat running out of time and we need to get as prepared as possible as fast as possible. The Oath Keepers national Board of Directors war-gamed what we think is the most likely move by our enemies to scrap the Constitution. On the BOD at the time were a Special Forces Major, an Army Ranger, and a Marine Scout-sniper veteran, as well as a retired Navy Commander and several Vietnam combat vets, and several other combat arms veterans. Playing devil’s advocate, and putting themselves in the enemy’s shoes, we estimated that the most effective course for “them” to follow would be to:

1. Intentionally trigger a catastrophic economic collapse as an economic “neutron bomb” (kills the people, but leaves the land intact). With the current intentional lack of a Strategic Grain Reserve, our population is in a strategic “checkmate” position where an economic collapse could be a near-extinction event for our population.

...[Read more at link above.]

2. Let the country descend into chaos. A national economic collapse would be like a “national Katrina” but lasting far longer, and because it is nation-wide, it would be far more intense. The cities would implode. All the government would have to do is contain them and let them implode. in the midst of that chaos, they could also do a decapitation strike on the leaders of the liberty movement, but other than that, “They” could just sit back and wait a month, two months, or three to be really sure the people are at a maximum level of starvation, weakness, and chaos, and then:

3. Ride in like the cavalry, to “save” us by means of martial law and scrapping our constitution once-and-for all. They could blame the collapse on the so-called “free market” and on not having enough government power, and they could blame delays in relief on the “extremists” in the patriot movement (i.e. “we would have gotten the food trucks in sooner, but the extremists were ambushing our safety check-points and resisting the necessary relocation to relief camps”). Their ready to go solution would be a world-wide version of the Fed, and a world wide government. People would be told to “just turn in your guns, and you’ll get food” and “just turn in the extremists, and you’ll get food.”

ADDITIONAL ANALYSIS: To the above, we now add Brandon Smith’s insight that with a war in Syria, the elites can trigger an economic collapse with a war – with Russia and China using economics as a weapon in retaliation. All China would have to do is dump US treasuries and refuse to trade with US dollars. That would begin the final death-spiral of the dollar. The Chinese would be blamed for the collapse, rather than the banksters.

...[Read more at link.]

We urge you to presume the worst in the short term, and to work in three or four month sprints – assume that a collapse will be triggered this fall/winter and do all you can to get yourselves and your communities ready.

If it doesn’t happen in the next four months, then do another sprint, of three or four more months of preparation. And keep going until it happens – which it will eventually, no matter what anyone does. The dollar is doomed.

We encourage each individual to build a food reserve, to set aside food for their neighbors (10% of their food is for others), and to have basic communications (at least a hand-held dual band radio), basic medical, and water purification, shelter, and weapons and ammo. We will post more details on our recommendations for preparedness in a follow-up post.

Spying for Fascist Police StateThe first three links here warn that the recent NSA-related spying scandals reveal that the ruling class is secretly attempting, via the politicians it has paid for and controls, to completely disenfranchise the great majority of U.S. citizens and install a police state, similar to its failed attempt in the 1930s, when they asked General Smedley Butler to lead a coup.http://progressiveliving.org/politics/fascism/dsac_scandal.htmhttp://progressiveliving.org/politics/fascism/business_roundtable_and_NSA.htmhttp://progressiveliving.org/politics/fascism/CFR_NSA_MI_DoD.htm

Successful EconomicsThe next link discusses the criteria for a successful economic system and proposes that the Mondragon system is among the best proven successes, while the similar ESOPs (Employee Stock Ownership Plans) are also very successful. The website has other info on Mondragon etc too.http://www.progressiveliving.org/economics_frameset.htm

Job GuaranteeThe next article link discusses MMT's (Modern Money Theory's) Job Guarantee program, which would permit local non-profits and members of the community and the unemployed to make grant proposals for any government to pay non-profits to hire the unemployed to do local work requested by the community.http://neweconomicperspectives.org/2012/02/alternative-fiscal-policies-why-job.html

I also read on the MMT website that the Job Guarantee (JG) program would work with any govt, even local govt. I had previously thought that it should be possible for any city or county govt, which are mostly all corporations, to include similar Job Guarantees in its bylaws or constitution. But, after reading about MMT's JG idea, I thought that might be better to try first. If it were successful, the local govt might be persuaded to write it into the bylaws.

National Debt = Public AssetsMMT also says the national debt is not a problem now or in the future, since govt debt is assets for the non-govt sectors. Economist Michael Hudson pointed out that the economy did poorly under Clinton, when the national debt was greatly reduced, and that Germany's hyperinflation period was not due to internal problems of printing money, but to external regulation of Germany's economy.

Tax the rich and better target the multinationals: The IMF has set off shockwaves this week in Washington by suggesting countries fight budget deficits by raising taxes. Guardian of financial orthodoxy, the International Monetary Fund, which is holding its annual meetings with the World Bank this week in the US capital, typically calls for nations in difficulty to slash public spending to reduce their deficits. But in its Fiscal Monitor report http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf , subtitled "Taxing Times", the Fund advanced the idea of taxing the highest-income people and their assets to reinforce the legitimacy of spending cuts and fight against growing income inequalities. "Scope seems to exist in many advanced economies to raise more revenue from the top of the income distribution," the IMF wrote, noting "steep cuts" in top rates since the early 1980s. According to IMF estimates, taxing the rich even at the same rates during the 1980s would reap fiscal revenues equal to 0.25 percent of economic output in the developed countries. "The gain could in some cases, such as that of the United States, be more significant," around 1.5 percent of gross domestic product, said the IMF report, which also singled out deficient taxation of multinational companies. In the US alone, legal loopholes deprive the Treasury of roughly $60 billion in receipts, the global lender said. The IMF managing director, Christine Lagarde, kept up the sales pitch for a more just fiscal policy. "It's clearly something finance ministers are interested in, it's something that is necessary for the right balance of public finances," said Lagarde, a former French finance minister.

Note: Yahoo! was the only major media in the US to pick up this eye-opening news, with the possible exception of a Forbes article http://www.forbes.com/sites/billfrezza/2013/10/15/the-international-monetary-fund-lays-the-groundwork-for-global-wealth-confiscation/ which shows how afraid they are of this development. For more on financial corruption, see the deeply revealing reports from reliable major media sources available here http://www.wanttoknow.info/financialnewsarticles .

NOTE: U.S. had 8 Depressions under the Gold Standard. After ending the Gold Standard we've had NO Depressions.

THE MYTH OF DEBThttp://neweconomicperspectives.org/2013/03/what-is-modern-monetary-theory-or-mmt.html

Modern Monetary Theory is a way of doing economics that incorporates a clear understanding of the way our present-day monetary system actually works – it emphasizes the frequently misunderstood dynamics of our so-called “fiat-money” economy. Most people are unnerved by the thought that money isn’t “backed” by anything anymore – backed by gold, for example. They’re afraid that this makes money a less reliable store of value. And, of course, it is perfectly true that a poorly managed monetary system, or one which is experiencing something like an oil-price shock, can also experience inflation. But people today simply don’t realize how much bigger a problem the opposite condition can be. Under the gold standard, and largely because of the gold standard, the capitalist world endured eight different deflationary slumps severe enough to be called “depressions.” Since the gold standard was abolished, there have been none – and, as we shall see, this is anything but coincidental.

The great virtue of modern, fiat money is that it can be managed flexibly enough to prevent *both* deflation and also any truly damaging level of inflation – that is, a situation where prices are rising faster than wages, or where both are rising so fast they distort a country’s internal or external markets. Without going into the details prematurely, there are technical reasons why a little bit of inflation is useful and normal. It discourages people from hoarding money and encourages healthy levels of consumption and investment. It promotes growth – provided that a country’s fiscal and monetary authorities manage it properly.

The trick is for the government to spend enough to ensure full employment, but not so much, or in such a way, as to cause shortages or bottlenecks in the real economy. These shortages and bottlenecks are the actual cause of most episodes of excessive inflation. If the mere existence of fiat monetary systems caused runaway inflation, the low, stable rates of consumer-price inflation we have seen over the past thirty-plus years would be pretty difficult to explain.

The essential insight of Modern Monetary Theory (or “MMT”) is that sovereign, currency-issuing countries are only constrained by real limits. They are not constrained, and cannot be constrained, by purely financial limits because, as issuers of their respective fiat-currencies, they can never “run out of money.” This doesn’t mean that governments can spend without limit, or overspend without causing inflation, or that government should spend any sum unwisely. What it emphatically does mean is that no such sovereign government can be forced to tolerate mass unemployment because of the state of its finances – no matter what that state happens to be.

Virtually all economic commentary and punditry today, whether in America, Europe or most other places, is based on ideas about the monetary system which are not merely confused – they are starkly and comprehensively counter-factual. This has led to a public discourse about things like budget deficits and Treasury debt which has become, without exaggeration, utterly detached from reality. Time and time again, these pundits declaim that hyperinflation is imminent, that interest rates are on the verge of an uncontrollable upward spike, and that the jig will be up for sure just as soon as the next T-bond auction fails. But even though, time after time, it is the pundits’ prognostications which fail, no one seems to take any notice. This must change. A reality-based economics is needed to make these things make sense again, and Modern Monetary Theory is here to put everyone on notice that a quite different jig is the one that’s really up.

[I'll try to add more later. In the mean time you can see more at the link above.]

Nowhere is disparity among the people of the world more evident than in socio-economic opportunity, a gap that is widening at a faster rate than ever before. The Prophet (PBUH) has foretold us of a time when the spread of *”Riba” (usury) would be so overwhelming that it would be extremely difficult for the people to avoid it. This situation calls for people to be extra cautious before deciding on what financial methods to use in personal or business transactions. We believe these times are upon us now.

Conventional systems of banking are profit-driven, and largely dependent on investments of capital derived from the interest charged on loans, and from certificates of deposit and other banking products. Zayed Peace Foundation hopes to bridge the wealth gap with the formation of Peace Bank. Peace Bank will follow the concept of cooperative banking, a system of banking in which depositors become both customer and owner. Consequently, depositors will share in a greater portion of the wealth generated by their deposit investments, as well as have extremely transparent reports on investments by the bank. There will be no fixed interest. Further, all investments will be held up to stringent standards of ethical investment practices, with tangible investments being the mainstay of the Peace Bank’s investment practices.

Grounded in the concept of ethical business practice and charity, Peace Bank will seek to impact the economic gap in several ways:

First, Peace Bank will avoid the conventional banking practice of “Riba” or usury (interest), that is, unearned income. This means that the depositors be the owners-customers rather than the bank; and, receiving the greater direct benefits from depositors’ investments, the economic gains will be structured on actual investments yields and the profits are shared rather than fixed.

Second, net income generated above and beyond that which is returned to shareholders and used in covering operations overhead will be used to fund charitable projects within the area of each bank’s location. Distributing real wealth and building a sense of community will be primary goals of the Peace Bank, and will be achieved through investment and economic stimulus programs in the communities where each bank is located.

The Peace Bank will also explore the areas of micro-financing in poorer nations where the system has yielded measurable benefits to the lower strata of the socio-economic structure.

The Peace bank will be headquartered on Peace Island, and will be a tax -free haven for proven charitable entities, allowing more wealth to reach those in actual need. With the world’s most competent and effective economic advisory services available, the Peace Bank system will be in a position to assist charity organizations in their overall success by advising and assisting them in their efforts to become sustainable. Creating self-sustaining systems will ensure greater social and economic growth to a larger number of people around the globe.

Peace Bank will not be perpetuating the credit crisis that is caused by purchasing debts. We will purchase only tangible assets, and our prospectus will reflect the investments that were made on behalf of our customer/owner. Income generated beyond what is returned to shareholders will be used for local charitable projects. All people want the community around them to improve in response to their actions – we want to know that we can affect our environment. At Peace Bank, we show the effects of investment to the customer locally, and this creates a healthy synergy of repeated transactions and resulting effects. A customer is much more likely to patronize a bank if he knows it will benefit the local center for the handicapped, or the local children’s school. At Peace Bank, we recognize that a respectfully and fairly treated customer is our friend for life, and we expect a long and prosperous partnership between ourselves and the communities, which we serve.

*"Riba" is the antithesis of the Qur’anic Economic order. An Economy based on ‘Riba’ results in individuals or organizations growing as parasites on the Labor and efforts of other people instead of their own, and cause massive economic exploitation and the emergence of Class conflicts. In a ‘Riba’ based Economy, the wealth is restricted in the hands of a minority only while in the Qur’anic Economic order the wealth circulates evenly in the whole of society and there are no class conflicts in the form of Rulers, and Capitalists against workers or laborers.

[See end of Thread for most recent Post. Subtitle in parentheses in thread title is title of most recent post.]

The Solari Report: Thursday, July 2, 2009 - 9pmET

Our 2nd Quarter Wrap-up is called "Surfing the Slow Burn." The "slow burn" http://solari.com/blog/?p=818 (http://solari.com/blog/?p=818) is my term for a centrally managed economy in which a small group of insiders covertly subsidize themselves at the expense of the outsiders through (i) monetary policy, (ii) manipulation of government resources, regulation and enforcement and (iii) manipulation of financial markets and data.

What was most remarkable in the second quarter was the distinct advantage enjoyed by those who have taken the time to understand what is happening and have positioned themselves to navigate the changes underway. The lesson of the second quarter is that understanding the "real deal" is the basis for effective action.

Indeed, when enough of us begin to do so, the possibilities for effective change grow exponentially. So despite all the "shock and awe" around us, something very positive is happening as more and more of us shift our thinking, take action and reach out to collaborate.

In our year-end wrap up, 2008: Looking Back http://solari.com/blog/?p=1929 (http://solari.com/blog/?p=1929), I said that the big question of 2008 was the same one I have been asking as $4 trillion went missing from the US government: "Where is the money?" http://solari.com/blog/?p=501 (http://solari.com/blog/?p=501)

In our 1st Qtr 2009: Looking Back http://solari.com/blog/?p=2379 (http://solari.com/blog/?p=2379), with bailouts approaching $12-14 trillion and counting (See Bailout Mo' Money http://solari.com/blog/?p=2258 (http://solari.com/blog/?p=2258)), I said that the importance of this question continued to grow. With the laws related to public and private financial management treated by insiders as mostly irrelevant, the global financial coup d' etat underway was becoming more apparent http://solari.com/blog/?p=2058 (http://solari.com/blog/?p=2058).

As I prepare our wrap up for the second quarter, the importance of missing money keeps growing as unemployment rises towards Great Depression levels http://solari.com/blog/?p=3342 (http://solari.com/blog/?p=3342) and an out of control financial system keeps getting wierder. (See The Missing Money http://solari.com/blog/?p=3208 (http://solari.com/blog/?p=3208) and $134.5 Billion Mystery Bonds http://solari.com/blog/?p=3276 (http://solari.com/blog/?p=3276))

The signs are growing that the Wall Street banks have now built their war chest and are moving to ensure that Main Street is on its knees or worse as they move in for the kill. (See Stimulus or Economic Hit? http://solari.com/blog/?p=3313 (http://solari.com/blog/?p=3313)) Signals of subtle capital controls that will help to force the continued flow of capital to Wall Street are growing as well. (See Foreign Financial Accounts http://solari.com/blog/?p=3269 (http://solari.com/blog/?p=3269) and Financial Coup d' Etat...401k Trial Balloon? http://solari.com/blog/?p=3297 (http://solari.com/blog/?p=3297))

When all of this legislation is viewed in totality, there will be no need to formally shred the U.S. Constitution since no one will be able to understand, let alone comply, with the trillions of rules related to every aspect of our lives and we certainly will not be able to pay the taxes and fees associated with staying alive anyway.

It would appear that the American people understand the legislative and appropriation wave rolling over us. I estimate that for every $1,000,000 awarded or loaned to the large banks in bailout money, Americans purchased one gun and 10,000 rounds of ammunition.

As I described in my last June Solari Report, state governments have been temporarily supported with the stimulus package. As predicted, the pain at the state and municipal levels has continued to rise with the California budget crisis serving as a bellweather. (See Shock Doctrine California, Part I, II, III, IV http://solari.com/blog/?p=3209 (http://solari.com/blog/?p=3209).)

As hopes for a last minute bailout from the federal government continue, Martin Weiss is now predicting that default is inevitable on $59 billion of California municipal bonds. This could send shockwaves through the entire muncipal market. If the Feds let California go down, more states are likely to follow. State and local land and assets, such as parks and open lands, will be ripe for the plucking. (See Financial Ecosystems http://solari.com/blog/?p=3171 (http://solari.com/blog/?p=3171))

This is the real-deal right here, this is where we're at, in my opinion, we are right around the corner for some very nasty stuff. Police state, no food in the stores, riots, WWII style mass propaganda, road-side check points, concentration camps, marshal law, etc. The are going to tighten the screws on us and everyone needs to prepare. I hope I'm able to get out of Florida, then tie up loose ends in Ohio, before I head over to New Hampshire in-time before it hits the fan. Everyone needs to focus on what's coming. Thank you for this excellent information.

Get ur done, Planet. Fed[private international banksters] are now retracting the money supply,reducing purchases of ridiculous amount of treasuries with counterfeit currency. Interest rates will now have to increase quickly. Before every crash, they and the banking community retract money and recall commercial paper, tighten up the available currency.

CSPOA's plan to end major corruption seems like the best plan on the table. I like Solari etc, and they do have good advice, like preparedness and networking etc, but I think we need to be proactive too. CSPOA is getting a constitution-supporting resolution/petition signed by lots of people and plans to take it to the fed govt this Sept in DC and then assemble a team of constitutional law experts to take action against those who do not uphold their oaths of office. I'd like to be on that team and there seem to be other knowledgeable Free Staters who should be on it too.

Get ur done, Planet. Fed[private international banksters] are now retracting the money supply,reducing purchases of ridiculous amount of treasuries with counterfeit currency. Interest rates will now have to increase quickly. Before every crash, they and the banking community retract money and recall commercial paper, tighten up the available currency.

Thank you Sam. Do you know of any organizations I can get involved in to make some contacts in NH, regarding the liberty movement? I joined the Free State Project, but that doesn't interface me with anyone, save for this forum. When I come in town I'd like to meet some people, I'm looking to establish a network with regards to people who are aware that we now live in a police state, so that there can be strength in numbers. Plus odds and ends, such as I need tires and maybe a battery for my car, and I'm waiting to get them in NH as not to support Nazi Florida, or Nazi Ohio...and I'd like to get them from a local shop that is owned by someone who is on the side of liberty (not Walmart).

Check this out Planet, I will send you another. www.freetownproject.com/Finding_the_Free_Town.html click on the few names there and say hello. Let me know if it works for you. Liberty Town..... Check out nh underground.com , forum only.

CSPOA's plan to end major corruption seems like the best plan on the table. I like Solari etc, and they do have good advice, like preparedness and networking etc, but I think we need to be proactive too. CSPOA is getting a constitution-supporting resolution/petition signed by lots of people and plans to take it to the fed govt this Sept in DC and then assemble a team of constitutional law experts to take action against those who do not uphold their oaths of office. I'd like to be on that team and there seem to be other knowledgeable Free Staters who should be on it too.

For preparedness grow sunflowers and chickens at least.

Why? Once SCOTUS declares is unconstitutional, the job is done. Its why the Founders created three branches and not two.

[/quote]Why? Once SCOTUS declares is unconstitutional, the job is done. Its why the Founders created three branches and not two.[/quote] Supreme Court has no enforcement powers, their decisions have been trampled on numerous times.

Really? So your under the belief that requesting that the President and Congress just not do what they've done so far is going to be the big enforcement?

I don,t know what your talking about? Executive office executes all the laws that he or she wants to and ignores the rest of them. Congress does the same thing as far as ignoring Supreme court decisions. Supreme Court never had any enforcement Authority and their decisions have been totally ignored dozens of times. Matter of fact, Congress has stacked the Supreme Court and increased[100%] its member at will, just to dilute its legislation opinion from the bench.

I'm talking about the fact that they are proposing to take action against those that do not uphold their oaths of office, what action would a team of constitutional law experts take but file with SCOTUS?

I'm talking about the fact that they are proposing to take action against those that do not uphold their oaths of office, what action would a team of constitutional law experts take but file with SCOTUS?

But that isn't going to remove anyone from office.

Team of Law experts could prepare articles of high crimes, perjury, abuse of office, abuse of power, corruption, lies under oath, etc for Congress members, White House staff, and mainly cabinet members and dept heads, epa, atf, fbi cia, irs, nsa, DHS, ice, dod, treasury, sec, etc, I could go on forever. If Congress won,t act and process with special prosecutors, and or Impeachment charges, then State Sheriffs in each federal employees Counties can prepare warrants for arrest. They could also go for re-call in many States that allow it. State Attorney Generals in residents states can proceed with charges of crimes and breach of Oath of Office.

EU Association Agreement with Ukraine Is a Gift to Kleptocratshttp://www.nakedcapitalism.com/2014/07/michael-hudson-eu-association-agreement-ukraine-gift-kleptocrats.htmlPosted on July 1, 2014 by Yves Smith

This video http://www.youtube.com/watch?feature=player_embedded&v=ugxqH5u5dPc#t=0 is a great, accessible discussion by Michael Hudson on the Real News Network about how the widely-touted EU deal with the Ukraine is actually an exercise in looting by kleptocrats. Hudson explains that unlike earlier pacts, the EU is making no investment in Ukraine, nor is it allowing Ukraine, which has an agricultural producing region, to have the benefits of the CAP that French farmers enjoy. Hudson point out that the supposed benefit of Ukraine having access to the EU for exports is a smokescreen, since Ukraine is going to lose its main export market, Russia, and the Europeans don’t want to buy Ukraine’s products. Hudson contends that this deal is a de facto takeover, with kleptocrats to be installed in key governmental positions. He anticipates that the result will be mass unemployment and unrest. - This portion of the transcript caught my eye:

HUDSON: Well, I’m going to begin by putting it in the big picture, and then I’ll get to the details. The big picture is that this is a form of colonialism almost identical to what Europe did in Africa and Latin America and the Near East. What it did in the 19th century in Africa, where property was owned communally, was it would go to the chieftains of a given tribe, as it did to the Saudi Arabian chieftains, and it would say, well, to make an agreement, you have to register all this oil of your country, but you register it in your own name. And once they registered it in their own name, then Britain or France or the other European powers could make a deal that the chieftains could then sell this property or make contracts on behalf of oil or minerals with the European colonial powers. And that’s how the colonial powers pried away all of this property from what had been tribal possession or communal possession.

Well, as you know, what happened in the Ukraine and the rest of Central Europe after 1991 was all of this public property that was the legacy of the Soviet domination was simply registered in the names of the factory managers. So Ukraine has been called the Nigeria of the North for a good reason. The factory managers and all the leading kleptocrats simply registered their factories in their own name(s) and took it over. And now it’s time for stage two of the process, and stage two is basically the agreement that was signed last Friday.

And stage two: WORONCZUK: But, Michael, when I’m reading the mainstream press here, it’s telling me that Ukraine is going to now have an export market of 28 nations, and that the economy is going to grow by 1 percent, and that this is especially going to make up for the loss of Crimea. How does this not equate to an economic gain for the nation?

HUDSON: Well, absolutely right, they’re going to have an export market of 28 nations. The problem is: what are they going to export? Right now what they’re exporting is largely military and other goods to Russia from Soviet-era factories in the Eastern Ukraine. But essentially part of the deal that was made with Europe is in Kiev they say, okay, we’re going to appoint governors of the Eastern Ukraine. It’s as if there was a military takeover of the United States and the military said, okay, we’re going to make Donald Trump governor of New York, we’re going to make the Koch brothers governors of Kansas and Missouri. They appointed kleptocrats to be governors to essentially loot the Russian regions. This guarantees that there’s going to be continual fighting as the Eastern Ukraine says, wait a minute, we’re being robbed, we didn’t vote for this, this agreement was not made under a legal Parliament, which is what Putin and what Lavrov were saying over the weekend.

So there’s guaranteed to be labor unrest and strikes in the East.

There’s not going to be any exports to Europe, because Europe, the last thing the Europeans want is any competition from the Ukraine, until such time as the Europeans can buy out Ukrainian agriculture, kick the Ukrainians off the land, and turn them into mechanized farming, and then take all the food and the land rent and the value of the food to the West. ….

WORONCZUK: Well, the terms of the economic association agreement also–from what I understand, the stipulation is that Ukraine now cannot join the Russian customs union. From what I understand, Russia is still Ukraine’s biggest export market. So how will this affect the Ukrainian economy?

HUDSON: Ha! That’s what nobody can figure out. Russia has already said, look, under the terms, if we were to let Ukraine continue to trade within the Russian Union, that means that we would let all the European goods go through the Ukraine and into Russia duty-free. And Russia’s already said that it has no intention of doing that. And it’s going to now have to raise the tariffs against Ukraine.

So in practice what’s going to happen is the goods that Russia used to get from the old Soviet-era factories in Eastern Ukraine–Russia’s going to build new, modern factories in Russia to make its own military goods and steel and the other things it got from Ukraine. So Russia’s going to become very quickly independent of Ukraine, leaving mass unemployment in the Eastern Ukraine and mass unrest. So you’re going to have Ukrainians without jobs and with nowhere to go, and it’s going to look like Greece or Ireland or Latvia without any of the European money that has gone into these associated countries.

Why the Tea Party & European Right Are Winning Elections http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=12011

HUDSON: I think what I'd like to talk about is the victory of David Brat in the Virginia primary last week and the connection between the Tea Party here, and a very similar victory of the nationalist right-wing parties in Europe in the parliamentary elections last month. In both cases, the critics have said, well, that's just the Tea Party, and they're ignorant and they're anti-immigrant, and this is the poor people voting against each other and blaming each other. The Tea Party's been blamed for an immigration--anti-immigrant platform. And the same thing has been happening with Le Pen's party in France and the Dutch parties.

But that's actually not what David Brat said in his campaign, and it's not what the right-wing parties in Europe are saying. Brat made it very clear that what he was opposing was the fact that the conservative Republicans, as well as the Democrats in Congress, have both joined to support Wall Street. He said that on his opponent Cantor's Rolodex were all the names of the big Wall Street contributors, the same contributors that are on Obama's Rolodex. So he made it very clear that the protest that he was looking for, the vote, was still the anger against the bailouts in 2008, the way the bailouts were handled. And similarly in Europe, the accusation is that supporting the eurozone and the European Central Bank and European unity gives the bankers the ability to take control of the European government and to use them against the people to impose austerity, debt deflation, and a whole set of bank rules that is essentially causing the same kind of unemployment and poverty in Europe that it's causing here in the United States.

WORONCZUK: So why do you think that the right-wing parties in Europe and the U.S. have been so successful in channeling the legitimate rage of its citizens against their governments?

HUDSON: You've almost said it in the question. They've been successful because they are the only people talking about this problem. Amazingly enough, where is the left at all this? In Europe, the socialist parties and the labor parties have moved to the right wing of the political spectrum. It was a socialist party in Greece that supported austerity and the privatization selloffs. It was the Labour Party in England that out-Thatcherized Margaret Thatcher in privatizing the transportation system. And it's the Democrats here who took control of the bailout over the Republican opposition. It was the Democrats and the Obama administration that has been blocking bankruptcy reform and blocking debt write-downs over the Republican Congress saying, hey, this--the bailout and your pro-Wall Street is all you. So the left-wing, who's essentially moved so far to the right that the traditional right-wing parties, like the tea parties that are controlled essentially by the rich to steer them against government, essentially the right-wing parties have made a left-wing move around the Democratic Party in the United States.

Highlights of MODERN MONEY THEORY: THE BASICShttp://neweconomicperspectives.org/2014/06/modern-money-theory-basics.html

... MMT reaches conclusions that are shocking to many who’ve been indoctrinated in the conventional wisdom. Most importantly, it challenges the orthodox views about government finance, monetary policy, the so-called Phillips Curve (inflation-unemployment) trade-off, the wisdom of fixed exchange rates, and the folly of striving for current account surpluses.

For most people, the greatest challenge to near-and-dear convictions is MMT’s claim that a sovereign government’s finances are nothing like those of households and firms. While we hear all the time the statement that “if I ran my household budget the way that the Federal Government runs its budget, I’d go broke”, followed by the claim “therefore, we need to get the government deficit under control”, MMT argues this is a false analogy. A sovereign, currency-issuing government is NOTHING like a currency-using household or firm. The sovereign government cannot become insolvent in its own currency; it can always make all payments as they come due in its own currency.

Indeed, if government spends currency into existence, it clearly does not need tax revenue before it can spend. Further, if taxpayers pay their taxes using currency, then government must first spend before taxes can be paid. Again, all of this was obvious two hundred years ago when kings literally stamped coins in order to spend, and then received their own coins in tax payment.

Another shocking truth is that a sovereign government does not need to “borrow” its own currency in order to spend. Indeed, it cannot borrow currency that it has not already spent! This is why MMT sees the sale of government bonds as something quite different from borrowing.

When government sells bonds, banks buy them by offering reserves they hold at the central bank. The central bank debits the buying bank’s reserve deposits and credits the bank’s account with treasury securities. Rather than seeing this as borrowing by treasury, it is more akin to shifting deposits out of a checking account and into a saving account in order to earn more interest. And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed.

MMT recognizes that bond sales by sovereign government are really part of monetary policy operations. While this gets a bit technical, the operational purpose of such bond sales is to help the central bank hit its overnight interest rate target (called the fed funds rate in the US). Sales of treasury bonds reduce bank reserves and are used to remove excess reserves that would place downward pressure on overnight rates. Purchases of bonds (called an open market purchase) by the Fed add reserves to the banking system, prevent overnight rates from rising. Hence, the Fed and Treasury cooperate using bond sales/bond purchases to enable the Fed to keep the fed funds rate on target.

You don’t need to understand all of that to get the main point: sovereign governments don’t need to borrow their own currency in order to spend! They offer interest-paying treasury securities as an instrument on which banks, firms, households, and foreigners can earn interest. This is a policy choice, not a necessity. Government never needs to sell bonds before spending, and indeed cannot sell bonds unless it has first provided the currency and reserves that banks need to buy the bonds.

... A lot of people have great difficulty [understanding] all this “money creation” business. It sounds like alchemy or even fraud. Banks simply create deposits when they make loans? Government simply creates currency or central bank reserves when it spends? What is this, creation of money out of thin air? Yes, indeed.

Hyman Minsky used to say that “Anyone can create money”; but “the problem lies in getting it accepted”. You must understand that “money” is by nature an IOU. You can create a dollar-denominated “money” by writing “IOU five dollars” on a slip of paper. Your problem is to get someone to accept it. Sovereign government has an easy time finding acceptors—in part because millions of us owe payments to government.

... Both Uncle Sam and Bank of America are constrained in their “money creation”, however. Uncle Sam is subject to the budget authority that is provided by Congress and the President. Occasionally he also bumps up against the crazy (yes, crazy!) Congressionally-imposed “debt limit”. Congress and the President could and should remove that debt limit, but we surely do want a budgeting process and we want to ensure that Uncle Sam is constrained by the approved budget.

... The problem is not the “thin air” nature of the creation, but rather the quantities of “money” created and the purposes for which it was created. Government spending for the public purpose is beneficial, at least up to the point of full employment of the nation’s resources. Bank lending for public and private purposes that are beneficial publicly and privately is also generally desirable.

However, lending comes with risk and requires good underwriting (assessment of credit worthiness); unfortunately our biggest banks largely abandoned the underwriting process in the 1990s, with disastrous results. One can only hope that policy-makers will restore the good banking practices that were developed over the past half-millennium, shutting down the largest dozen global banks that have no interest in good banking.

... Our system is a state money system. Our currency is government’s liability, an IOU that is redeemable for tax obligations and other payments to the state. The phrase “debt-free money” is based on a misunderstanding. Remember, “anyone can create money”, the “problem is to get it accepted”. They are all IOUs. They are either spent or lent into existence. Their issuers must accept them in payment. They are accepted by those who will make payments, directly or indirectly, to the issuers.

In the developed nations we have thoroughly monetized the economies. Much (maybe most) of our economic activity requires money, and we need specialized institutions that can issue widely accepted monetary IOUs to enable that activity to get underway.

While our governments are large, they are not big enough to provide all the monetary IOUs we need for the scale of economic activity we desire. And we—at least we Americans—are skeptical of putting all monetized economic activity in the hands of a much bigger government. I cannot see any possibility of running a modern, monetized, capitalist economy without private financial institutions that create the monetary IOUs needed to initiate economic activity.

The answer, it seems to me, to our current financial calamities does not reside in elimination of our for-profit financial institutions, even if I do see a positive role to be played by new public financial institutions (maybe some national development banks and some state development banks and a revived postal saving system?).

We do, however, need fundamental reform—including downsizing (probably breaking up or closing) of the behemoths, greater oversight, more transparency, prosecution of financial fraud, and putting more of the “public” in our “public-private partnership” banking institutions.

Manhattan just another island haven for dirty moneyHow shady characters are using lax rules to funnel wealth through high-end New York apartmentsBy Michael Hudsonhttp://www.publicintegrity.org/2014/07/03/15026/manhattan-just-another-island-haven-dirty-moneyhttp://hetq.am/eng/news/55571/hidden-in-plain-sight-new-york-just-another-island-haven.html

IMF pushes Ukraine to 'voluntarily committing suicide'Michael Hudson: http://rt.com/op-edge/170960-economy-imf-ukraine-oligarchs/The basic principle to bear in mind is that finance today is war by non-military means.Western support will allow more IMF and European lending to prop the Ukrainian currency so the Ukrainian oligarchs can move their money safely to British and US banks[Also:] http://www.rogerannis.com/michael-hudson-imf-is-pushing-ukraine-to-voluntary-suicide/

Mike Norman EconomicsAn MMT site bringing you dogma-free economics without the pleadings of self interestDylan Matthews — A guaranteed income for every American would eliminate poverty — and it wouldn't destroy the economyhttp://www.vox.com/2014/7/23/5925041/guaranteed-income-basic-poverty-gobry-labor-supply

Is the New BRICS Bank a Challenge to US Global Financial Power?http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=12123&updaterx=2014-07-22+21%3A41%3A34

DESVARIEUX: So, Michael, we've been covering Ukraine quite extensively. And I know you've been keeping track of things on the economic front. What's the latest?

HUDSON: Well, one of the things that has not been in the news is that a recent Senate bill, 2277, directed the U.S. Agency for International Development to begin guaranteeing loans for the fracking of oil and gas in the Ukraine. And Vice President Biden's son has become the head of the biggest fracking company in the Ukraine. And what's not usually known is that the armies from Kiev that are marching into the Eastern of Ukraine have been basically protecting the fracking equipment.

Now, for the last nine months, local cities in the east in Ukraine have said, wait a minute, we want local control over the fracking. The people in the city of Sloviansk wanted to oppose the shale gas field from being developed, 'cause they said, look, this is going to destroy our water supply and our land. And essentially what Kiev is doing is saying, well, you're terrorists if you're opposing the oil drilling.

Now, just imagine in this country if President Obama and Vice President Biden were to send troops into upstate New York, which has opposed oil/gas drilling, and bombed Rochester, bombed Buffalo, and began just bombing the cities and shooting the opponents of the fracking. That's exactly what's happening in the Ukraine. And they're doing this supported by the World Bank. The whole attempt is to make Ukraine independent from having to get the gas imports from Russia. And yet already the neighboring Czech Republic, the Netherlands, France, Germany, they've all--Germany's halted the shale gas drilling for seven years because they worry it's going to destroy the groundwater.

Now, in the Eastern Ukraine, where the fighting is now, all of the groundwater under Dnieper and the other major water flows flow into Yalta and into the Crimea. They've turned off the water, most of the water, to Crimea, trying to starve it. So there's a diversion of water away from agriculture towards the fracking.

Meanwhile, in the Western Ukraine, the World Bank has been supporting essentially the large-scale alienation of agricultural land to foreign investors. The World Bank is a wonderful index. It's the index of screwing labor and destroying the environment. They call it the ease of doing business index. But the index for agriculture, they have a special index just for ease of doing business in agriculture. And that means getting rid of rules against pesticides, getting rid of rules against labeling food, against additives, and against everything. And it's very much like the Trans-Pacific Partnership proposal and the Transatlantic partnership proposal. The problem is that Europe is actually opposing all of these pesticides and all the laboring. So you may have the irony of the Ukraine following the World Bank's directions and getting rid of the restrictions on agriculture and making it impossible to export its crops to Europe.

The good thing is that in the past the World Bank has always opposed a country growing food crops. The aim of the World Bank in the past, since 1945, has been to make Latin America and Africa and other countries as export plantation crops and by their food on America from the U.S. farms. This is almost the first time that the World Bank has supported grain production, because that's what the Western Ukraine used to be, the bread basket of Western Europe. But in this case, the World Bank has said, we're going to support you only if you sell out your land to foreigners.

So the intention is to make the Western Ukraine look something like Ireland in the 19th century, when the British landlords owned much of the Irish land, put sheep on it, getting rid of the people on the land. And even in the midst of the Irish potato famine, Ireland was still exporting grain to England, because the grain lands were owned by the British landlords. In this case, for the Ukraine what you're going to have is foreign ownership of Ukrainian agriculture exporting food that Ukrainians aren't able to buy because of the dismantling of the Ukrainian economy that you're seeing today as they're fighting the war there.

See also Dr Michael Hudson interview with RT International: http://mikenormaneconomics.blogspot.com/2014/07/dr-michael-hudson-interview-with-rt.html

See also Max Keiser interview regarding Wall St. Profiting from War & Destruction; American Empire fraying at the edges; the World knows the U.S. is a failing rogue state: http://michael-hudson.com/2014/08/america-unzipped/

Why Are Stock Markets So Volatile?Interview video and transcript at http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=12533Michael Hudson explains that the volatility is due to investors coming to realize company CEO schemes to make it look like their companies are making profits when they're really buying back their own stocks so the CEOs can make gains for themselves, instead of their companies. He explains also why the Fed can't raise interest rates; the stock market would crash.

How U.S. Meddling in Ukraine is Rightly Backfiringhttp://rt.com/op-edge/201127-gas-deal-ukraine-russia-europeEurope is finding that the U.S. is acting like its enemy.

President Obama was talking mainly to his American base, and to the Republican Party in particular to work on the Trans-Pacific Partnership, as well as to his Democratic base. His vision is a Trans-Pacific Partnership that will abolish government regulation of the environment, abolish regulation of banking, and implicitly nullify the Dodd-Frank Act. If a bank misbehaves or a government requires higher reserve requirements, then under the new international law that Mr. Obama is pushing, the government have to pay the private bank as if it weren’t regulated. And if a government such as China imposes environmental fines on a company for polluting the environment, the government will have to pay the company whatever it would have made if it didn’t have any such fines. []

Mr. Obama said that the United States is also going to cut back carbon emissions. But he’s still pushing for the XL Pipeline with Alberta to bring tar sands oil into the United States. That is the most high polluting activity on the planet.

What has been less talked about are the banking changes that have been announced. []

Mr. Putin said that as a result of these deals, Russian trade with China and the rest of Asia is going to increase from 25 percent to 40 percent of Russia’s GDP. This leaves Europe out in the cold. What’s been clear at the meeting is that there’s a coming together between China and Russia. This has been the opposite of what American foreign policy has been trying to push for since the 1980s. What is ironic is that where the United States thought that it was putting pressure on Russia and sanctions following the NATO adventure in Ukraine, what it’s actually done is bring Russia and China closer together. []

what U.S. Cold Warriors really want is to break up Russia and China, and to interrupt their financial and banking services to disorient their economies. So Russia, China and Iran – and presumably other Asian countries – are now moving to establish their own currency clearing systems. []

In the next few days you’re going to see Europe being left out. The sanctions that the United States and NATO have insisted that it impose on Russia have led to Russian counter-sanctions against French and Baltic and European exports. French farmers are already demonstrating, and Marine Le Pen’s nationalists are likely to win the next election. The Baltic States are also screaming from losing their farm exports. France, Latvia, and even Germany had been looking to Russia as a growing market the last few years. Yet their leaders obeyed U.S. demands not to deal with the Russian market. This leaves Europe in a position of economic stagnation.

As for the sanctions isolating Russia economically, this is just what it needs to protect its industrial revival and economic independence. In conjunction with China, it’s integrating the Russian economy with that of China, Kazakhstan and Iran. Russia is now going to be building at least two atomic reactors in Iran. The center of global investment is shifting to Asia, leaving the United States out as well as Europe.

So you can expect at the G20 Brisbane meetings next week to increase pressure from Europe to break away from the U.S. sanctions. All the United States has diplomatically at the present time is military pressure, while Russia and China have economic growth – markets and investment opportunities opening up. []

what Obama essentially said, it’s “I’m a Republican and I’m supporting Wall Street.” He’s letting the Republicans know he’s pushing for the kind of giveaways that the lobbyists have written into the Trans-Pacific Partnership. []

Wisconsin yet again faces mounting budget deficit projections. The danger is that Gov. Scott Walker will now sell off the public's property to fill the fiscal potholes created by his tax policies. Chanting the GOP refrain of "lower tax rates good, higher tax rates bad" as if it were a magic incantation, he seemed to believe Arthur Laffer's infamous cocktail napkin "Laffer Curve" depicting lower tax rates delivering higher tax revenues.

We already have seen what happened in Kansas when that state followed this failed fiscal path. Kansas Gov. Sam Brownback, also a Republican, promised voters that cutting taxes would raise tax revenues. Instead, cutting taxes created such deep revenue shortfalls that the state became an object lesson in fiscal folly for others to avoid.

This is now forcing cutbacks in public services — and the GOP is telling voters that they will have to tighten their belts. Services permitting the upward mobility of working people are being cut, as if U.S. voters live in a Third World country.

Now it's Wisconsin's turn. Walker has voiced the same income tax cutting catechism that Brownback imposed on Kansas. Walker ran for re-election in large part on having eliminated a $3.6 billion inherited budget shortfall while cutting taxes — and, more to the point, by making cuts in public employee benefits while holding most state worker wage increases to below the rate of inflation.

Reducing living standards for workers in the public sector is cutting consumer demand in the state's economy. In effect, Walker plugged the tax deficit in the short-term by reducing consumer spending at local restaurants, taverns, car dealers and the innumerable goods and services tendered by Wisconsin's local businesses.

The governor pretended that cutting inflation-adjusted wages and benefits in the public sector would not reduce consumer demand in the economy, if the "savings" were spent by the taxpayers now having lower tax bills.

This argument ignores the fact that the tax cuts disproportionately go to the wealthiest, who typically spend and invest more of their money out of state, or indeed on more Wall Street stocks and bonds and foreign luxury purchases. The supposed savings thus escape Wisconsin rather than being spent locally, thereby slowing economic growth.

Entering his new term,Walker no longer faces balanced budgets. The state deficit is projected to widen to $2.2 billion. Revenue shortfalls are not new, but at least they have not been chronic. Former Gov. Jim Doyle inherited budget imbalances and began to slowly pay them down, but the deficits again widened after the Great Recession that began in late 2007.

Then, as now, part of the problem was poor tax and economic development policy failing to maximize wealth creation in Wisconsin. Just as important as how many taxes are collected is how they are collected. The key is to structure tax policies in ways that maximize wealth creation. Walker's tax policies, however, risk cutting the bone, not the fat.

He now confronts a dilemma. His "tools" of income and property tax cuts have not "repaired" the budget. As he pursues the 2016 GOP presidential nomination, the danger is that he will respond with another "tool": selling off the public domain by renewing his attempts to sell state power plants and prime public land in Madison in no-bid contracts.

These privatization sell-offs will raise short-term revenue allowing the governor to take a victory lap on fiscal rectitude just in time for the 2016 GOP presidential primaries. But this will be by selling off Wisconsin's "family silver" — land, power plants and other basic infrastructure that are supposed to benefit taxpayers.

The governor and his party's state Legislature should not sell off this public property, currently owned free of debt. This would provide rent-extraction opportunities for the buyers, turning Wisconsin's taxpayers into renters of property they once owned free and clear.

To be sure, there is room for investigating whether a private vendor could better manage our state-owned power plants or if a private developer should construct and manage buildings on public land thus permitting maximum value creation from them, but this is different than selling the underlying asset owned by the taxpayers.

The risk is that the governor's ambition might rationalize actions in his political self-interest, but not the public's. Tax rates can be lowered or raised in response to budgetary needs and adjusting for errors by past political office holders, but public assets cannot be easily acquired again once sold.

The long-term fiscal damage from their sale is permanent. That is what England learned from the devastating wave of Thatcherism that raised fees taxpayers pay for transportation, water and other hitherto public services that have been privatized and financialized.

The problem with Wisconsin is that unlike Britain, whose economy was saved by North Sea oil revenues coming online precisely at the point when Thatcher's policies were cutting demand in the economy, Wisconsin has no such natural resource windfall to save it from a sell-off of the public's property.

Wisconsinites would be well-advised to avoid this path and be vigilant against attempts to liquidate the public's property in order to provide short-term fixes to budgetary shortfalls created by tax cuts chiefly benefiting the most affluent.

Wisconsin and the whole country need a new discourse on wealth creation. Blanket lowering or raising taxes will not balance our state budgets or deliver prosperity.

The type of tax structure selected is paramount — to make it progressive instead of regressive and to incentivize investment over speculation. What must be avoided at all costs is selling off the public's property.

This Walker "tool" will not "repair" our budgets but instead risks shattering budgets and the middle class alike.

Jeffrey Sommers is a visiting faculty member at the Stockholm School of Economics in Riga, Latvia. Michael Hudson is the visiting distinguished research professor of economics at the University of Missouri-Kansas City.

U.S. “New Cold War” Policy Has Backfired – And Created Its Worst Nightmare. Shift in Trade Patterns and Military Allianceshttp://www.globalresearch.ca/u-s-new-cold-war-policy-has-backfired-and-created-its-worst-nightmare-shift-in-trade-patterns-and-military-alliances/5419470By Michael Hudson

The world’s geopolitics, major trade patterns and military alliances have changed radically in the past month. Russia has re-oriented its gas and oil trade, and also its trade in military technology, away from Europe toward Eurasia.

The result is the opposite of America’s hope for the past half-century of dividing and conquering Eurasia: setting Russia against China, isolating Iran, and preventing India, the Near East and other Asian countries from joining together to create an alternative to the U.S. dollar area. American sanctions and New Cold War policy has driven these Asian countries together in association with the Shanghai Cooperation Organization as an alternative to NATO, and in the BRICS moves to avoid dealing with the dollar area, the IMF and World Bank austerity programs.

Regarding Europe, America’s insistence that it join the New Cold War by imposing sanctions on Russia and blocking Russian gas and oil exports has aggravated the Eurozone’s economic austerity, making it even more of a Dead Zone. This week a group of Germany’s leading politicians, diplomats and cultural celebrities wrote an open letter to Angela Merkel protesting her pro-U.S. anti-Russian policy. By overplaying its hand, the United States is in danger of driving Europe out of the U.S. economic orbit.

Turkey already is moving out of the U.S.-European orbit, by turning to Russia for its energy needs. Iran also has moved into an alliance with Russia. Instead of the Obama administration’s neocons dividing and conquering as they had planned, they are isolating America from Europe and Asia. Yet there has been almost no recognition of this in the U.S. press, despite its front-page discussion throughout Europe and Asia. Instead of breaking up the BRICS, the dollar area is coming undone.

This week, President Putin is going to India to negotiate a gas and arms deal. Last week he was in Turkey diverting what was to be the South Stream pipeline away from southern Europe to Turkey. And Turkey is becoming an associate of the Shanghai Cooperation Organization integrating the BRICS in a defensive alliance against the United States, now that it is obvious that it has no chance of joining the EU.

A few months earlier, Russia announced the largest oil and gas trade and pipeline investment ever, with China – along with a transfer of missile defense technology.

2. There has been almost no discussion of this vast geopolitical realignment in the U.S. media, largely because it represents a defeat for the New Cold War policy pushed by the neocons over the past year, ever since Russia convinced President Obama not to go to war in Syria, which had been a neocon military aim.

Their response was to isolate Russia and economically attack its trade and hence balance-of-payments strength: its gas and oil trade with Europe. Last February, U.S. diplomats engineered a Pinochet-style coup d’état in Ukraine, and used this as a lever to reverse Europe’s buildup of trade with Russia.

The aim was to punish Russia’s economy – and in the process to press for a regime change against Putin, putting in place a more pro-U.S., neoliberal Yeltsin-style regime by causing a financial crisis.

The assumption underlying this policy was that since the Soviet Union was dissolved in 1991, Russia was turning toward Europe to re-integrate its economy and society. And Europe for its part sought to make Russia its main energy supplier – of oil as well as gas, through new pipelines being built to circumvent Ukraine. Northstream ran via the North Sea to northern Europe. Southstream was to be built via Bulgaria and Serbia to southern Europe – mainly Italy and Austria.

Germany for its part looked to Russia as an export market, to earn the rubles to pay for Russian gas and oil. Other European countries stepped up their agricultural trade with Russia, and France agreed to build the enormous Mistral aircraft carrier. In short, the ending of the Cold War promised to bring a much closer economic and hence political integration of Russia with Europe – cemented largely by a gas pipeline network.

3. U.S. Cold Warriors have tried to disrupt this trade. The plan was to isolate Russia and lock Europe into the U.S. economy. The dream was to export U.S. shale gas to Europe, squeezing out Russia and thereby hurting its balance of payments.

This was always a pipedream. But what U.S. heavy-handed military confrontation with Russia really has done is to drive a political wedge between the United States and Europe. Last week, Putin gave a speech saying he found little point in negotiating with European politicians, because they simply followed U.S. orders via NATO and by U.S. pressure on German politicians, French politicians and other European politicians.

In following U.S. New Cold War confrontation, Europe has been acting against its own economic interests. Its neoliberal Third Energy law has effectively blocked Russia from having any economic gain in selling more gas to Europe.

4. Rentier pipeline politics --- [FASCIST GREED]The U.S. neoliberal plan has been to insist on non-Russian control of the pipelines that would carry Russian gas and oil to Europe. The idea is to use this pipeline as a tollbooth to siphon off the revenue that Russia had hoped to receive from Europe.

Here’s the best way to understand what has occurred. Imagine that the United States had a law that owners of buildings could not also own the elevators in them. This would mean that the owners of the Empire State Building, for instance, could not own their elevators. Some other investors could buy the elevators, and then tell the building’s renters or other occupants that they would have to pay a fee each time they rode up to the 40th floor, the 50th floor, the 60th floor, and so forth.

The result would be that instead of the landlord receiving the rental value of the Empire State Building, the elevator owner could demand the lion’s share. Without access, the building would be a walk-up and its rents would fall – unless renters paid the elevator tollbooth.

This is what would happen with an oil pipeline owned by parties hostile to Russia. It is to avoid this that Gazprom insisted on building its own pipeline, under Russian control, to prevent rent-extracting investors. When Europe sought to block this by pretending that “free markets” meant separating pipeline ownership from the gas suppliers, it was trying to carve out a rent-extraction opportunity to siphon off Russian gas revenue.

The European Commission earlier had pressed an anti-Gazprom policy last year, in the process of imposing its austerity program on Greece. It insisted that Greece pay the IMF for having bailed out foreign bondholders by selling off assets in the public domain. The largest asset was Greece’s oil rights in the Aegean and its commercial oil-related infrastructure. When Gazprom was the largest bidder, Europe blocked the sale. The result has been to impose even deeper austerity on Greece, polarizing that nation’s politics in an increasingly anti-EU and anti-IMF stance – and hence, anti-US Cold War politics.

5. What is occurring is a radical shift in U.S.-European diplomacy – in a way that according to textbook theory is inherently unstable and unworkable.

Europe has inverted the major textbook premises of how national diplomacy is conducted. Instead of basing this diplomacy on economic and commercial interests, it is subordinating these interests to U.S. control. And as for Europe’s membership in NATO, instead of viewing military policy as an arm of foreign diplomacy, it is subordinating economic diplomacy, trade patterns, gas and oil supplies, export markets for industry and agriculture all to serve NATO’s military ends.The objective no longer is military security as originally was the logic for NATO. Europe’s economic realignment against Russia threatens to bring military conflict directly into the continent as a result of the proxy war in Ukraine.

It has been said that nations do not have friends or enemies, only national interests. Most of these are economic. But today in Europe, German Chancellor Merkel seems to be ignoring German and other European economic interests. Still obsessed with her hatred of the East German Communist regime, she sees in Russia only an enemy, not an economic market and supplier of raw materials and customer for German manufactures and technology. Likewise, her political love for the United States deems it Europe’s natural friend, without taking into account how its New Cold War policy toward Europe – “Let’s you and Russia fight” – undercuts European continental interests and exacerbates its austerity.

The United States for its part has adopted von Clausewitz’s statement that war is an extension of foreign policy by other means in a very limited form: war seems to be the only lever that the United States is using in its foreign policy these days. And lacking an ability to mount a ground invasion, its only real threat is to tear economies apart by aerial bombing, as it has done to Iraq, Afghanistan, Libra and now Syria – and is doing by backing a proxy war in Ukraine.

Title: Re: Economics (Video: Bankers Are Parasites, Not Part Of The Real Economy)
Post by: Luck on January 07, 2015, 03:20:03 pm

Ravdeep Kanda‎Stuff They Don't Want You to KnowDecember 25, 2014 at 2:56pmhttps://www.facebook.com/ConspiracyStuff/posts/1516179875333220

Play videohttps://www.youtube.com/watch?v=A10bor8FBAk

Economist Michael Hudson Explains Bank and Bankers Are Parasites And Not Part Of The Real Economy. They Enslave The American People Into Debt Forever And Ever.

This doesn't look quite like an ordinary TED talk, but it claims it is. Regardless, it's a very interesting talk about how to fix the money system, using simple computer, internet and software engineering: https://www.youtube.com/watch?v=NZBRJU6YLtY

Has the IMF Annexed Ukraine?http://www.globalresearch.ca/has-the-imf-annexed-ukraine/5431718By Michael HudsonVideo and TranscriptGlobal Research, February 17, 2015Real News Network and Information Clearing HouseThis interview with Michael Hudson makes clear that the loan to Ukraine is wildly out of line with IMF rules, making it painfully obvious that this “rescue” is all about propping up the government so it can continue to wage war rather than economic development.

Greek Finance Minister Varoufakis Wants Austerity ... for the Rich http://www.truthdig.com/avbooth/item/greek_finance_minister_varoufakis_wants_austerity_for_the_rich_20150225TruthdigVideo and Transcript“The finance ministers of Europe are not all in favor of balancing the budget if it has to be balanced by taxing the rich,” economist Michael Hudson told ...

MH: Economists for the last 50 years have used the term “host economy” for a country that lets in foreign investment. This term appears in most mainstream textbooks. A host implies a parasite. The term parasitism has been applied to finance by Martin Luther and others, but usually in the sense that you just talked about: simply taking something from the host.

But that’s not how biological parasites work in nature. Biological parasitism is more complex, and precisely for that reason it’s a better and more sophisticated metaphor for economics. The key is how a parasite takes over a host. It has enzymes that numb the host’s nervous system and brain. So if it stings or gets its claws into it, there’s a soporific anesthetic to block the host from realizing that it’s being taken over. Then the parasite sends enzymes into the brain. A parasite cannot take anything from the host unless it takes over the brain.

The brain in modern economies is the government, the educational system, and the way that governments and societies make their economic policy models of how to behave. In nature, the parasite makes the host think that the free rider, the parasite, is its baby, part of its body, to convince the host actually to protect the parasite over itself.

That’s how the financial sector has taken over the economy. Its lobbyists and academic advocates have persuaded governments and voters that they need to protect banks, and even need to bail them out when they become overly predatory and face collapse. Governments and politicians are persuaded to save banks instead of saving the economy, as if the economy can’t function without banks being left in private hands to do whatever they want, free of serious regulation and even from prosecution when they commit fraud. This means saving creditors – the One Percent – not the indebted 99 Percent.

It was not always this way. A century ago, two centuries ago, three centuries ago and all the way back to the Bronze Age, almost every society has realized that the great destabilizing force is finance – that is, debt. Debt grows exponentially, enabling creditors ultimately to foreclose on the assets of debtors. Creditors end up reducing societies to debt bondage, as when the Roman Empire ended in serfdom.

About a hundred years ago in America, John Bates Clark and other pro-financial ideologues argued that finance is not external to the economy. It’s not extraneous, it’s part of the economy, just like landlords are part of the economy. This means that if the financial sector takes more revenue out of the economy as interest, fees or monopoly charges, it’s because finance is an inherent and vital part of the economy, adding to GDP, not merely siphoning it off from producers to pay Wall Street and the One Percent. So our economic policy protects finance as if it helps us grow, not siphons off our growth.

A year or two ago, Lloyd Blankfein of Goldman Sachs said that the reason Goldman Sachs’ managers are paid more than anybody else is because they’re so productive. The question is, productive of what? The National Income and Product Accounts (NIPA) say that everybody is productive in proportion to the amount of money they make/take. It doesn’t matter whether it’s extractive income or productive income. It doesn’t matter whether it’s by manufacturing products or simply taking money from people, or simply by the fraud that Goldman Sachs, Citigroup, Bank of America and others paid tens of millions of dollars in fines for committing. Any way of earning income is considered to be as productive as any other way. This is a parasite-friendly mentality, because it denies that there’s any such thing as unearned income. It denies that there’s a free lunch. Milton Friedman got famous for promoting the idea that there’s no such thing as a free lunch, when Wall Street knows quite well that this is what the economy is all about. It’s all about how to get a free lunch, with risks picked up by the government. No wonder they back economists who deny that there’s any such thing!

ED: To get to the root of the issue, what’s interesting to me about this analogy that we’re talking about is that we hear the term neoliberalism all the time. It is an ideology I that’s used to promote the environment within which this parasitic sort of finance capital can operate. So could you talk a bit about the relationship between finance capital and neoliberalism as its ideology.

MH: Today’s vocabulary is what Orwell would call DoubleThink. If you’re going to call something anti-liberal and against what Adam Smith and John Stuart Mill and other classical economists described as free markets, you pretend to be neoliberal. The focus of Smith, Mill, Quesnay and the whole of 19th-century classical economics was to draw a distinction between productive and unproductive labor – that is, between people who earn wages and profits, and rentiers who, as Mill said, “get rich in their sleep.” That is how he described landowners receiving groundrent. It also describes the financial sector receiving interest and “capital” gains.

The first thing the neoliberal Chicago School did when they took over Chile was to close down every economics department in the country except the one they controlled at the Catholic University. They started an assassination program of left wing professors, labor leaders and politicians, and imposed neoliberalism by gunpoint. Their idea is you cannot have anti-labor, deregulated “free markets” stripping away social protections and benefits unless you have totalitarian control. You have to censor any idea that there’s ever been an alternative, by rewriting economic history to deny the progressive tax and regulatory reforms that Smith, Mill, and other classical economists urged to free industrial capitalism from the surviving feudal privileges of landlords and predatory finance.

[See http://real-economics.blogspot.com/2015/10/michael-hudson-on-baleful-effects-of.html (http://real-economics.blogspot.com/2015/10/michael-hudson-on-baleful-effects-of.html) for the rest of the interview.]

Economist Michael Hudson notes that “the greatest fortunes of our time have come from privatizing the public domain”.

‘Debt that can’t be paid, won’t be’https://philebersole.wordpress.com/2015/11/03/debt-that-cant-be-paid-wont-be/See his book, Bubbles Always Burst: the Education of an Economist by Michael Hudson11/03/15 05:22 philebersole.wordpress.comWall Street’s prosperity and the income of the super-rich came more and more from extracting wealth from the system, rather than facilitating the creation of new wealth. As Hudson repeatedly wrote, debt that can’t be paid, won’t be. The result was the financial crash of 2008. The question then became who would absorb the loss. The rational method would have been to write down the debts to what the borrowers could afford to pay, which would have allowed the economy to restart and would have taught lenders and holders of mortgage-backed securities a lesson about prudence. Instead the Federal Reserve and the U.S. Treasury bailed out the banks and the bond-holders, while allowing foreclosures to proceed.

Michael Hudson: The Paradox of Financialized Industrializationhttp://www.nakedcapitalism.com/2015/10/michael-hudson-the-paradox-of-financialized-industrialization.html10/17/15 02:36 nakedcapitalism.comWhat worries me about the political consequences of Roemer’s model is that it focuses only on what Marx said about the production sector and employer-labor relations. It does not ask how “endowments” come into being – or how China has changed so radically in the past generation. It therefore neglects the danger of industrial capitalism lapsing back into a rent-and-interest economy. And by the same token, it underplays the threat to China and other socialist economies of adopting the West’s surviving pre-feudal practices of predatory Bubble Finance (debt leveraging to raise prices) and wealth in the form of land-rent charges. These two dynamics – interest and rent – represent a privatization of banking and land that rightly are public utilities.

Fiscal Myths of Campaign 2016: A New Kindle e-Bookhttp://www.correntewire.com/fiscal_myths_of_campaign_2016_a_new_kindle_e_book- Most of the world, and most notably the United States, is in the grip of fiscal myths fostered by the ideology of neoliberalism. There is virtual unanimity across the major political parties in the United States in accepting the viewpoint of neoliberalism, and the fiscal myths associated with it.-This book analyzes and rejects numerous fiscal myths in these categories. Myths about: “Running Out of Money”; Government Debt; the “Burden of Government Debt”; the Government “Family” or “Household;”; “Spending Too Much,” Inflation, and Hyper-inflation; “Shared Sacrifice” and “Government Austerity”; “Our Economic Future”; “Money”; and “Fiscal Responsibility”; and concludes with a comparison of “Fiscal Myths and Fiscal Truths”.

Can debt catalyse the next global rebellion?http://magazine.ouishare.net/2013/10/graeber-morality-debt/I have no doubts that professional economists can work it out: people like Michael Hudson and Steve Keen (see the video) have already come up with actual models.

New Socialist Government Keeps Portuguese People Under The Whiphttp://www.paulcraigroberts.org/2015/11/12/portuguese-revolution-falls-far-short-paul-craig-roberts/

Bubbles Always Burst: the Education of an Economist, an excerpt from Michael Hudson’s Killing the Host.http://www.counterpunch.org/2015/09/28/bubbles-always-burst-the-education-of-an-economist/

Reforming the U.S. Financial and Tax System, an interview of Michael Hudson for station KPFK in Los Angeles.http://michael-hudson.com/2011/11/reforming-the-u-s-financial-and-tax-system/

Parasites in the Body Economic: the Disasters of Neoliberalism, an interview of Michael Hudson for Counterpunch Radio.http://www.counterpunch.org/2015/10/05/parasites-in-the-body-economic-the-disasters-of-neoliberalism/

Why Greece’s Debt Is Illegal, an interview of Michael Hudson for the Real News Network.http://michael-hudson.com/2015/07/why-greeces-debt-is-illegal/

Part 1.My Education as an Economist: How I Learned to Reject the Market Dogma That Dominates the Professionhttp://www.alternet.org/economy/my-education-economist-how-i-learned-reject-market-dogma-dominates-professionA personal journey through economic thought.By Michael Hudson / CounterPunchSeptember 28, 2015

I did not set out to be an economist. In college at the University of Chicago I never took a course in economics or went anywhere near its business school. My interest lay in music and the history of culture. When I left for New York City in 1961, it was to work in publishing along these lines. I had worked served as an assistant to Jerry Kaplan at the Free Press in Chicago, and thought of setting out on my own when the Hungarian literary critic George Lukacs assigned me the English-language rights to his writings. Then, in 1962 when Leon Trotsky’s widow, Natalia Sedova died, Max Shachtman, executor of her estate, assigned me the rights to Trotsky’s writings and archive. But I was unable to interest any house in backing their publication. My future turned out not to lie in publishing other peoples’ work.

My life already had changed abruptly in a single evening. My best friend from Chicago had urged that I look up Terence McCarthy, the father of one of his schoolmates. Terence was a former economist for General Electric and also the author of the “Forgash Plan.” Named for Florida Senator Morris Forgash, it proposed a World Bank for Economic Acceleration with an alternative policy to the existing World Bank – lending in domestic currency for land reform and greater self-sufficiency in food instead of plantation export crops.My first evening’s visit with him transfixed me with two ideas that have become my life’s work. First was his almost poetic description of the flow of funds through the economic system. He explained why most financial crises historically occurred in the autumn when the crops were moved. Shifts in the Midwestern water level or climatic disruptions in other countries caused periodic droughts, which led to crop failures and drains on the banking system, forcing banks to call in their loans. Finance, natural resources and industry were parts of an interconnected system much like astronomy – and to me, an aesthetic thing of beauty. But unlike astronomical cycles, the mathematics of compound interest leads economies inevitably into a debt crash, because the financial system expands faster than the underlying economy, overburdening it with debt so that crises grow increasingly severe. Economies are torn apart by breaks in the chain of payments.That very evening I decided to become an economist. Soon I enrolled in graduate study and sought work on Wall Street, which was the only practical way to see how economies really functioned. For the next twenty years, Terence and I spoke about an hour a day on current economic events. He had translated A History of Economic Doctrines: From the Physiocrats to Adam Smith, the first English-language version of Marx’s Theories of Surplus Value – which itself was the first real history of economic thought. For starters, he told me to read all the books in its bibliography – the Physiocrats, John Locke, Adam Smith, David Ricardo, Thomas Malthus, John Stuart Mill and so forth.The topics that most interested me – and the focus of this book – were not taught at New York University where I took my graduate economics degrees. In fact, they are not taught in any university departments: the dynamics of debt, and how the pattern of bank lending inflates land prices, or national income accounting and the rising share absorbed by rent extraction in the Finance, Insurance and Real Estate (FIRE) sector. There was only one way to learn how to analyze these topics: to work for banks. Back in the 1960s there was barely a hint that these trends would become a great financial bubble. But the dynamics were there, and I was fortunate enough to be hired to chart them.My first job was as mundane as could be imagined: an economist for the Savings Banks Trust Company. No longer existing, it had been created by New York’s then-127 savings banks (now also extinct, having been grabbed, privatized and emptied out by commercial bankers). I was hired to write up how savings accrued interest and were recycled into new mortgage loans. My graphs of this savings upsweep looked like Hokusai’s “Wave,” but with a pulse spiking like a cardiogram every three months on the day quarterly dividends were credited.The rise in savings was lent to homebuyers, helping fuel the post-World War II price rise for housing. This was viewed as a seemingly endless engine of prosperity endowing a middle class with rising net worth. The more banks lend, the higher prices rise for the real estate being bought on credit. And the more prices rise, the more banks are willing to lend – as long as more people keep joining what looks like a perpetual motion wealthcreating machine.The process works only as long as incomes are rising. Few people notice that most of their rising income is being paid for housing. They feel that they are saving – and getting richer by paying for an investment that will grow. At least, that is what worked for sixty years after World War II ended in 1945.But bubbles always burst, because they are financed with debt, which expands like a chain letter for the economy as a whole. Mortgage debt service absorbs more and more of the rental value of real estate, and of homeowners’ income as new buyers take on more debt to buy homes that are rising in price.Tracking the upsweep of savings and the debt-financed rise in housing prices turned out to be the best way to understand how most “paper wealth” has been created (or at least inflated) over the past century. Yet despite the fact that the economy’s largest asset is real estate – and is both the main asset and largest debt for most families – the analysis of land rent and property valuation did not even appear in the courses that I was taught in the evenings working toward my economics PhD.When I finished my studies in 1964, I joined Chase Manhattan’s economic research department as its balance-of-payments economist. It was proved another fortunate on-the-job training experience, because the only way to learn about the topic was to work for a bank or government statistical agency. My first task was to forecast the balance of payments of Argentina, Brazil and Chile. The starting point was their export earnings and other foreign exchange receipts, which served as were a measure of how much revenue might be paid as debt service on new borrowings from U.S. banks.Just as mortgage lenders view rental income as a flow to be turned into payment of interest, international banks view the hard-currency earnings of foreign countries as potential revenue to be capitalized into loans and paid as interest. The implicit aim of bank marketing departments – and of creditors in general – is to attach the entire economic surplus for payment of debt service.I soon found that the Latin American countries I analyzed were fully “loaned up.” There were no more hard-currency inflows available to extract as interest on new loans or bond issues. In fact, there was capital flight. These countries could only pay what they already owed if their banks (or the International Monetary Fund) lent them the money to pay the rising flow of interest charges. This is how loans to sovereign governments were rolled over through the 1970s.

Part 2.My Education as an EconomistTheir foreign debts mounted up at compound interest, an exponential growth that laid the ground for the crash that occurred in 1982 when Mexico announced that it couldn’t pay. In this respect, lending to Third World governments anticipated the real estate bubble that would crash in 2008. Except that Third World debts were written down in the 1980s (via Brady bonds), unlike mortgage debts.My most important learning experience at Chase was to develop an accounting format to analyze the balance of payments of the U.S. oil industry. Standard Oil executives walked me through the contrast between economic statistics and reality. They explained how using “flags of convenience” in Liberia and Panama enabled them to avoid paying income taxes either in the producing or consuming countries by giving the illusion that no profits were being made. The key was “transfer pricing.” Shipping affiliates in these tax-avoidance centers bought crude oil at low prices from Near Eastern or Venezuelan branches where oil was produced. These shipping and banking centers – which had no tax on profits – then sold this oil at marked-up prices to refineries in Europe or elsewhere. The transfer prices were set high enough so as not to leave any profit to be declared.In balance-of-payments terms, every dollar spent by the oil industry abroad was returned to the U.S. economy in only 18 months. My report was placed on the desks of every U.S. senator and congressman, and got the oil industry exempted from President Lyndon Johnson’s balance-of-payments controls imposed during the Vietnam War.My last task at Chase dovetailed into the dollar problem. I was asked to estimate the volume of criminal savings going to Switzerland and other hideouts. The State Department had asked Chase and other banks to establish Caribbean branches to attract money from drug dealers, smugglers and their kin into dollar assets to support the dollar as foreign military outflows escalated. Congress helped by not imposing the 15 percent withholding tax on Treasury bond interest. My calculations showed that the most important factors in determining exchange rates were neither trade nor direct investment, but “errors and omissions,” a euphemism for “hot money.” Nobody is more “liquid” or “hot” than drug dealers and public officials embezzling their country’s export earnings. The U.S. Treasury and State Department sought to provide a safe haven for their takings, as a desperate means of offsetting the balance-of-payments cost of U.S. military spending.In 1968 I extended my payments-flow analysis to cover the U.S. economy as a whole, working on a year’s project for the (now defunct) accounting firm of Arthur Andersen. My charts revealed that the U.S. payments deficit was entirely military in character throughout the 1960s. The private sector – foreign trade and investment – was exactly in balance, year after year, and “foreign aid” actually produced a dollar surplus (and was required to do so under U.S. law).My monograph prompted an invitation to speak to the graduate economics faculty of the New School in 1969, where it turned out they needed someone to teach international trade and finance. I was offered the job immediately after my lecture. Having never taken a course in this subject at NYU, I thought teaching would be the best way to learn what academic theory had to say about it.I quickly discovered that of all the subdisciplines of economics, international trade theory was the silliest. Gunboats and military spending make no appearance in this theorizing, nor do the all-important “errors and omissions,” capital flight, smuggling, or fictitious transfer pricing for tax avoidance. These elisions are needed to steer trade theory toward the perverse and destructive conclusion that any country can pay any amount of debt, simply by lowering wages enough to pay creditors. All that seems to be needed is sufficient devaluation (what mainly is devalued is the cost of local labor), or lowering wages by labor market “reforms” and austerity programs. This theory has been proved false everywhere it has been applied, but it remains the essence of IMF orthodoxy.Academic monetary theory is even worse. Milton Friedman’s “Chicago School” relates the money supply only to commodity prices and wages, not to asset prices for real estate, stocks and bonds. It pretends that money and credit are lent to business for investment in capital goods and new hiring, not to buy real estate, stocks and bonds. There is little attempt to take into account the debt service that must be paid on this credit, diverting spending away from consumer goods and tangible capital goods. So I found academic theory to be the reverse of how the world actually works. None of my professors had enough real-world experience in banking or Wall Street to notice.I spent three years at the New School developing an analysis of why the global economy is polarizing rather than converging. I found that “mercantilist” economic theories already in the 18th century were ahead of today’s mainstream in many ways. I also saw how much more clearly early economists recognized the problems of governments (or others) relying on creditors for policy advice. As Adam Smith explained, a creditor of the public, considered merely as such, has no interest in the good condition of any particular portion of land, or in the good management of any particular portion of capital stock. … He has no inspection of it. He can have no care about it. Its ruin may in some cases be unknown to him, and cannot directly affect him.The bondholders’ interest is solely to extricate as much as they can as quickly as possible with little concern for the social devastation they cause. Yet they have managed to sell the idea that sovereign nations as well as individuals have a moral obligation to pay debts, even to act on behalf of creditors instead of their domestic populations.

My warning that Third World countries would not to be able to pay their debts disturbed the department’s chairman, Robert Heilbroner. Finding the idea unthinkable, he complained that my emphasis on financial overhead was distracting students from the key form of exploitation: that of wage labor by its employers. Not even the Marxist teachers he hired paid much attention to interest, debt or rent extraction.I found a similar left-wing aversion to dealing with debt problems when I was invited to meetings at the Institute for Policy Studies in Washington. When I expressed my interest in preparing the ground for cancellation of Third World debts, IPS co-director Marcus Raskin said that he thought this was too far off the wall for them to back. (It took another decade, until 1982, for Mexico to trigger the Latin American “debt bomb” by announcing its above-noted inability to pay.)In 1972 I published my first major book, Super Imperialism: The Economic Strategy of American Empire, explaining how taking the U.S. dollar off gold in 1971 left only U.S. Treasury debt as the basis for global reserves. The balance-of-payments deficit stemming from foreign military spending pumped dollars abroad. These ended up in the hands of central banks that recycled them to the United States by buying Treasury securities – which in turn financed the domestic budget deficit. This gives the U.S. economy a unique free financial ride. It is able to self-finance its deficits seemingly ad infinitum. The balance-of-payments deficit actually ended up financing the domestic budget deficit for many years. The post-gold international financial system obliged foreign countries to finance U.S. military spending, whether or not they supported it.

Part 3.My Education as an EconomistSome of my Wall Street friends helped rescue me from academia to join the think tank world with Herman Kahn at the Hudson Institute. The Defense Department gave the Institute a large contract for me to explain just how the United States was getting this free ride. I also began writing a market newsletter for a Montreal brokerage house, as Wall Street seemed more interested in my flow-of-funds analysis than the Left. In 1979 I wrote Global Fracture: The New International Economic Order, forecasting how U.S. unilateral dominance was leading to a geopolitical split along financial lines, much as the present book’s international chapters describe the strains fracturing today’s world economy.Later in the decade I became an advisor to the United Nations Institute for Training and Development (UNITAR). My focus here too was to warn that Third World economies could not pay their foreign debts. Most of these loans were taken on to subsidize trade dependency, not restructure economies to enable them to pay. IMF “structural adjustment” austerity programs – of the type now being imposed across the Eurozone – make the debt situation worse, by raising interest rates and taxes on labor, cutting pensions and social welfare spending, and selling off the public infrastructure (especially banking, water and mineral rights, communications and transportation) to rent-seeking monopolists. This kind of “adjustment” puts the class war back in business, on an international scale.The capstone of the UNITAR project was a 1980 meeting in Mexico hosted by its former president Luis Echeverria. A fight broke out over my insistence that Third World debtors soon would have to default. Although Wall Street bankers usually see the handwriting on the wall, their lobbyists insist that all debts can be paid, so that they can blame countries for not “tightening their belts.” Banks have a self-interest in denying the obvious problems of paying “capital transfers” in hard currency. My experience with this kind of bank-sponsored junk economics infecting public agencies inspired me to start compiling a history of how societies through the ages have handled their debt problems. It took me about a year to sketch the history of debt crises as far back as classical Greece and Rome, as well as the Biblical background of the Jubilee Year. But then I began to unearth a prehistory of debt practices going back to Sumer in the third millennium BC. The material was widely scattered through the literature, as no history of this formative Near Eastern genesis of Western economic civilization had been written.It took me until 1984 to reconstruct how interest-bearing debt first came into being – in the temples and palaces, not among individuals bartering. Most debts were owed to these large public institutions or their collectors, which is why rulers were able to cancel debts so frequently: They were cancelling debts owed to themselves, to prevent disruption of their economies. I showed my findings to some of my academic colleagues, and the upshot was that I was invited to become a research fellow in Babylonian economic history at Harvard’s Peabody Museum (its anthropology and archaeology department).Meanwhile, I continued consulting for financial clients. In 1999, Scudder, Stevens & Clark hired me to help establish the world’s first sovereign bond fund. I was told that inasmuch as I was known as “Dr. Doom” when it came to Third World debts, if its managing directors could convince me that these countries would continue to pay their debts for at least five years, the firm would set up a self-terminating fund of that length. This became the first sovereign wealth fund – an offshore fund registered in the Dutch West Indies and traded on the London Stock Exchange.New lending to Latin America had stopped, leaving debtor countries so desperate for funds that Argentine and Brazilian dollar bonds were yielding 45 percent annual interest, and Mexican medium-term tessobonos over 22 percent. Yet attempts to sell the fund’s shares to U.S. and European investors failed. The shares were sold in Buenos Aires and San Paolo, mainly to the elites who held the high-yielding dollar bonds of their countries in offshore accounts. This showed us that the financial managers would indeed keep paying their governments’ foreign debts, as long as they were paying themselves as “Yankee bondholders” offshore. The Scudder fund achieved the world’s second highest-ranking rate of return in 1990.During these years I made proposals to mainstream publishers to write a book warning about how the bubble was going to crash. They told me that this was like telling people that good sex would stop at an early age. Couldn’t I put a good-news spin [on the dark forecast] and tell readers how they could get rich from the coming crash? I concluded that most of the public is interested in understanding a great crash only after it occurs, not during the run-up when good returns are to be made. Being Dr. Doom regarding debt was like being a premature anti-fascist.

Part 4. (End)My Education as an EconomistSo I decided to focus on my historical research instead, and in March 1990 presented my first paper summarizing three findings that were as radical anthropologically as anything I had written in economics. Mainstream economics was still in the thrall of an individualistic “Austrian” ideology speculating that charging interest was a universal phenomena dating from Paleolithic individuals advancing cattle, seeds or money to other individuals. But I found that the first, and by far the major creditors were the temples and palaces of Bronze Age Mesopotamia, not private individuals acting on their own. Charging a set rate of interest seems to have diffused from Mesopotamia to classical Greece and Rome around the 8th century BC. The rate of interest in each region was not based on productivity, but was set purely by simplicity for calculation in the local system of fractional arithmetic: 1/60th per month in Mesopotamia, and later 1/10th per year for Greece and 1/12th for Rome.Today these ideas are accepted within the assyriological and archaeological disciplines. In 2012, David Graeber’s Debt: The First Five Thousand Years tied together the various strands of my reconstruction of the early evolution of debt and its frequent cancellation. In the early 1990s I had tried to write my own summary, but was unable to convince publishers that the Near Eastern tradition of Biblical debt cancellations was firmly grounded. Two decades ago economic historians and even many Biblical scholars thought that the Jubilee Year was merely a literary creation, a utopian escape from practical reality. I encountered a wall of cognitive dissonance at the thought that the practice was attested to in increasingly detailed Clean Slate proclamations.Each region had its own word for such proclamations: Sumerian amargi, meaning a return to the “mother” (ama) condition, a world in balance; Babylonian misharum, as well as andurarum, from which Judea borrowed as deror, and Hurrian shudutu. Egypt’s Rosetta Stone refers to this tradition of amnesty for debts and for liberating exiles and prisoners. Instead of a sanctity of debt, what was sacred was the regular cancellation of agrarian debts and freeing of bondservants in order to preserve social balance. Such amnesties were not destabilizing, but were essential to preserving social and economic stability.To gain the support of the assyriological and archaeological professions, Harvard and some donor foundations helped me establish the Institute for the Study of Long-term Economic Trends (ISLET). Our plan was to hold a series of meetings every two or three years to trace the origins of economic enterprise and its privatization, land tenure, debt and money. Our first meeting was held in New York in 1984 on privatization in the ancient Near East and classical antiquity. Today, two decades later, we have published five volumes rewriting the early economic history of Western civilization. Because of their contrast with today’s pro-creditor rules – and the success of a mixed private/public economy – I make frequent references in this book to how earlier societies resolved their debt problems in contrast with how today’s world is letting debt polarize and enervate economies.By the mid-1990s a more realistic modern financial theory was being developed by Hyman Minsky and his associates, first at the Levy Institute at Bard College and later at the University of Missouri at Kansas City (UMKC). I became a research associate at Levy writing on real estate and finance, and soon joined Randy Wray, Stephanie Kelton and others who were invited to set up an economics curriculum in Modern Monetary Theory (MMT) at UMKC. For the past twenty years our aim has been to show the steps needed to avoid the unemployment and vast transfer of property from debtors to creditors that is tearing economies apart today.I presented my basic financial model in Kansas City in 2004, with a chart that I repeated in my May 2006 cover story for Harper’s. The Financial Times reproduced the chart in crediting me with [as] being one of the eight economists to forecast the 2008 crash. But my aim was not merely to predict it. Everyone except economists saw it coming. My chart explained the exponential financial dynamics that make crashes inevitable. I subsequently wrote a series of op-eds for the Financial Times dealing with Latvia and Iceland as dress rehearsals for the rest of Europe and the United States.The disabling force of debt was recognized more clearly in the 18th and 19th centuries (not to mention four thousand years ago in the Bronze Age). This has led pro-creditor economists to exclude the history of economic thought from the curriculum. Mainstream economics has become blindly pro-creditor, pro-austerity (that is, anti-labor) and anti-government (except for insisting on the need for taxpayer bailouts of the largest banks and savers). Yet it has captured Congressional policy, universities and the mass media to broadcast a false map of how economies work. So most people see reality as written by the One Percent, and it is a travesty of reality.Spouting ostensible free market ideology, the pro-creditor mainstream rejects what the classical economic reformers actually wrote. One is left to choose between central planning by a public bureaucracy, or even more centralized planning by Wall Street’s financial bureaucracy. The middle ground of a mixed public/private economy has been all but forgotten, denounced as “socialism.” Yet every successful economy in history has been a mixed economy.This essay is excerpted from the introduction to Killing the Host.Michael Hudson’s new book, Killing the Host is published in e-format by CounterPunch Books and in print by Islet. He can be reached via his website, mh@michael-hudson.com

Debt is Different this Timehttp://permaliv.blogspot.com/2015/12/debt-is-different-this-time.html

Paul Krugman on Challenging the Oligarchyhttp://real-economics.blogspot.com/2015/12/paul-krugman-on-challenging-oligarchy.html

Is Full Employment also on the Table, Malcolm?http://theaimn.com/is-full-employment-also-on-the-table-malcolm/#comment-413441

How to Get Rid of Your Landlord and Socialize American Housing, in 3 Easy Steps:Homelessness, unaffordable urban real estate, devastating gentrification, and the housing bubble are all rooted in privatized housing.http://www.thenation.com/article/how-to-get-rid-of-your-landlord-and-socialize-american-housing-in-3-easy-steps/[Article Excerpt:]- Closer to home, private ownership of land underlies racist segregation. The aforementioned FHA policy, for instance, designed to protect homeowners’ access to gains in their houses’ location value, provided white people with the incentive to take their capital and flee urban centers for sprawling exurban developments, there to adopt racial exclusivity covenants, in order to prevent black people from moving in and undermining the location price—thus, the plot of A Raisin in the Sun. In the resulting “inner city,” which the public Home Owners’ Loan Corporation “red-lined” on its residential security maps, black people who were locked out of “middle-class” neighborhoods were conscripted to capital-starved, decaying ghettos, where parasitic slumlords reigned supreme.- Finally, developers have an incentive to snap up urban land and then leave it vacant until it appreciates in value, driven by community development around it, and then sell it. Meanwhile, residents have to live with the social repercussions of a community riddled with vacant lots.- What to do?- There are a few ways to turn land and housing stock toward the public good.- An exclusion fee- For a start, everyone should be compensated for their exclusion from passage over certain locations on the earth. To do this, we ought to levy an exclusion fee whereby the location price of the property in question would be returned to its rightful recipient, the community. As long as land value is socially created and land ownership is duty-free, a theft is occurring.- The idea for such a fee was most famously advocated by political economist Henry George in his book Progress and Poverty, under the name “single tax” or “land-value tax.” Several municipalities in George’s native Pennsylvania have a version of it: a two-tiered property tax, wherein the assessed value of the location is taxed at a higher rate than the assessed value of the building. For best results, 100 percent of the location price should be confiscated and invested in a sovereign wealth fund, the way Alaska’s oil royalties are. That fund could either pay out universal dividends, the way the Alaska Permanent Fund does, or provide the public with a huge pool of resources with which to invest in public institutions. How huge? Michael Hudson estimates that the land value of New York City alone is greater than the total combined worth of the entire country’s productive infrastructure.- Community land trusts- But why endow private profit-motivated interests control over construction at all? There is no reason to suspect that a given property-development capitalist should be more capable of determining for a community what optimally desirable new buildings to produce than the community itself is. Luckily, there is an entity capable of turning development over to the most concerned parties: nonprofit community land trusts, their boards typically composed at least one-third of residents, take land off the market, and lease homes long-term to residents at below-market rates, retaining the majority of the home equity gained over time.- The predominantly black and Latino residents of the Dudley Street area of Roxbury, one of Boston’s poorest neighborhoods, got Boston city officials to take the unprecedented step of granting the power of eminent domain to the community for more than 1,300 parcels of abandoned land. With this tract, the Dudley Street Neighborhood Initiative (DSNI) established a community land trust that has democratically directed a renovation project resulting in hundreds of affordable-housing units and other public spaces, among them community centers, new schools, a community greenhouse, parks, and playgrounds.- While the rest of Boston has lately struggled with a blight of post-bubble vacancies, followed by a massive wave of turn-overs due to rising rents, residents of DSNI’s land trust maintained a stable community. Most of the first batch of houses sold on the trust still contain their initial owners, who are passing them on to their children. “If you’re looking to buy a house, flip it, and speculate elsewhere,” says Tony Hernandez, longtime resident and director of operations for the land trust, “you’d better move on, because that’s not what this is intended for.”[More at link above.]

[This Kindle e-book, along with the forthcoming vol II, is intended to contribute to an effort to dispel the austerian myths about fiscal sustainability/responsibility that prevent Americans from understanding what policies can contribute toward fulfilling public purpose and what policies only take us further away from that goal. A great struggle for the future of American Democracy and for the heritage of the New Deal, the Fair Deal, and the Great Society is underway. The outcome is likely to depend on people developing a correct understanding of real fiscal responsibility, so that the full policy space available to the Federal Government in seeking public purpose can be used, if there is a will to do that. The perspectives developed in the book, will, hopefully, help to secure and extend US democracy in all its dimensions, and also FDR’s Economic Bill of Rights, the unfinished business of the New Deal.]

Macrobusiness: New Years Weekend 2016 Linkshttp://www.macrobusiness.com.au/2016/01/new-years-weekend-2016-links-jan-1-2-3/#comment-2495519

Take a Load Off Fannie – Salvaging the Mortgage Giants Without Bankrupting the Taxpayershttps://goodwinmuriel26.wordpress.com/2016/01/02/take-a-load-off-fannie-salvaging-the-mortgage-giants-without-bankrupting-the-taxpayers/

50110Michael Hudson Video: The Financial Sector Is Not the Economy; It's a Parasitehttp://subrealism.blogspot.com/2016/01/why-do-you-all-allow-these-parasites-to.html

Government Debt and Deficits Are Not the Problem. Private Debt Is. by Michael Hudsonhttps://dandelionsalad.wordpress.com/2013/03/17/government-debt-and-deficits-are-not-the-problem-private-debt-is-by-michael-hudson/

The Hyperinflation Myth: The Citadel Is Breached: Congress Taps the Fed for Infrastructure Fundinghttps://fbkfinanzwirtschaft.wordpress.com/2016/01/17/the-citadel-is-breached-congress-taps-the-fed-for-infrastructure-funding/

Local Economist on The Big Short (Movie)http://post.thestranger.com/blogs/slog/2016/01/27/23486025/local-economist-on-the-big-short

Economic growth: How it works; how it fails; why wealth disparity occurshttp://beforeitsnews.com/economy/2016/02/economic-growth-how-it-works-how-it-fails-why-wealth-disparity-occurs-2-2793662.html?currentSplittedPage=2

"Men don't change. The only thing new in the world is the history you don't know." - Harry S. Truman.

Our American story begins calmly enough, by the mid 1700s, the Colonies were well established and fairly prosperous, there was full employment, no income tax, and prices were generally stable. Benjamin Franklin wrote, "There was abundance in the Colonies, and peace was reigning on every border. It was difficult, and even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort was prevailing in every home. The people, in general, kept the highest moral standards, and education was widely spread." --- U.S. Representative, Charles Binderup, Unrobing the Ghosts of Wall Street, July 5, 1941.

When Franklin traveled to London in 1763, he saw a completely different situation. "The streets are covered with beggars and tramps," he wrote. He asked his friends how England, with all its wealth, could have so much poverty among its working classes. They replied that England had too many workers! The well-to-do were overburdened with taxes, and could not pay more to relieve the poverty of the unemployed workers. In a meeting with merchants and bankers at the British Board of Trade, members asked Franklin how the American Colonies managed to collect enough money to support their poor. Franklin replied, "That is simple. In the Colonies, we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to [any] one." --- Both quotes from Charles Binderup, Ibid.

"It passed through no banker's hands, but was loaned to the people direct, thus saving banking toll and banking restriction of volume; nor are there any panics or fluctuations recorded. Thomas Powell, M.P., of England, who had acted as governor and commander-in-chief of all provinces, in a book written by him in 1768, says in regard to this colonial system of money: 'I will venture to say that there never was a wiser or better measure, never one better calculated to serve the uses of an increasing country, and never was a measure more steadily pursued or more faithfully executed for forty years together than the loan office in Pennsylvania, formed and administered by the assembly of the province.'" --- Samuel Leavitt, Our Money Wars, 1894.

"Gold and silver are not intrinsically [of] equal value with iron. Their value rests chiefly on the estimation they happen to be in among the generality of nations. Any other well-founded credit is as much an equivalent as gold and silver. Paper money, well-founded, has great advantages over gold and silver; being light and convenient for handling large sums, and not likely to have its volume reduced by demands for exportation." --- Benjamin Franklin.

"A legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. When your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bares the endless burden of unpayable debt and usury." --- Attributed to Benjamin Franklin - Ellen Brown and Reed Simpson, Web of Debt, 2008.

The "endless burden" of debt-based money issued by banks hits the economic nail on the head. The difference is that a government can "spend" money into existence without debt. It enters the economy and circulates endlessly, facilitating trade. Banks, however, by their very nature, can only "lend" money and then they demand it back, with interest, actually decreasing the circulating money supply. In England, ALL the money in circulation was "lent" into existence by the privately-owned Bank of England, which collected interest on every pound and penny in circulation. However, unlike a real loan, the Bank of England didn't demand the return of its bank note money, it was content just to sit back and collect interest on it - year after year after year forever. The Bank lent the government the money it needed, in the form of paper bank notes and the government gave the bank an equal amount of interest-bearing government bonds as "collateral." The interest payments were made by taxing the citizens of England and her colonies, and the money continually flowed from the producers and workers, into the hands of the owners of England's bonds, the privately-held, Bank of England. This debt money system continually siphons the earnings of all of the producing classes and transfers it through the government, to the wealthy bankers in a manner few would recognize.

"In 1763 the British Parliament declared all Colonial acts for the issue of paper currency to be void. [They started to take such actions in 1751, I read elsewhere, but the earlier measures apparently weren't restrictive enough to hurt the colonists much. - Luck] 'Every medium of exchange,' said the British Board of Trade, 'should have an intrinsic value, which paper has not.' Dr. Franklin there and then exploded this bosh more than a century and a quarter ago though many parrots are still repeating it. 'However fit, (said Franklin) a particular thing may be for a particular purpose, whenever that thing is not to be had, or not to be had in sufficient quantity, it becomes necessary to use something else, the fittest thing that can be got in lieu of it. Bank bills and banker's notes are in daily use here (in London), as a medium of trade, yet they have no intrinsic value, but rest on the credit of those that issued them, as paper bills in the Colonies do on the credit of the respective settlements there." ... "Being payable in cash upon sight by the drawers is indeed a circumstance that cannot attend the Colony bills, their cash being drawn from them by the British trade; but the legal tender being instituted, is rather a greater advantage to the possessor, since he need not be at the trouble of going to a particular bank or banker to demand the money." --- Gordon Clark, Shylock: As Banker, Bondholder, Corruptionist, Conspirator, 1894.

Realizing Colonial Scrip was cutting into their profits, the Bank of England demanded an end to the practice and pressed Parliament for the passage of the Currency Act of 1764. Franklin "...went before a committee of Parliament to answer a report of the Board of Trade, dated February 9, 1764, containing reasons for restricting the issue of paper bills of credit in America 'as a legal tender,' and, in his unanswerable argument against the restriction, he said: 'If carrying out all the gold and silver ruins the country, every colony was ruined before it made paper money. But far from being ruined by it, the colonies that have made use of paper money have been and are all in a thriving condition. ... Pennsylvania, before it made and paper money, was totally stripped of its gold and silver ... The difficulties for want of cash were accordingly very great, the chief part of trade being carried on by the extremely inconvenient method of barter; when, in 1723, paper money was first made there, which gave new life to business, promoted greatly the settlement of new lands (by lending small sums to beginners on easy interest, to be paid in installments), whereby the province has so greatly increased in inhabitants that the export from hence thither is now more than tenfold what it then was, and by their trade with foreign colonies they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this country." --- Freeman Otis Willey, Whither are We Drifting as a Nation, 1882.

The British Parliament apparently cared more for the Bank of England's argument than Ben Franklin's. The passage of Parliament's 1764 Currency Act forced the Colonies to use only British money Bank of England notes, and put the colonists squarely under the thumb of the British central bank, just like the citizens of England. The American colonists were forced to borrow all their money from the Bank of England and pay them interest, in order to conduct their business without resorting to barter.

With the loss of Colonial Scrip, there was a sharp decrease in the American money supply, resulting in an economic depression. Whenever the money supply of a nation is reduced, you invariably have a recession or, if severe enough, depression. You will see this principle in action again and again throughout our history. "I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money, and equally of no sharp decline in the stock of money that was not accompanied by a severe depression." --- Milton Friedman, economist. Friedman's statement is as close to a hard truth as you can get in the (intentionally) mushy field of economics. He didn't discover it, it's not anything new, he's just repeating the obvious - It is axiomatic. It's the economics version of: "The sky is blue."

We all know that if the money supply of a nation is INCREASED, we have inflation and prices rise. If you are an American, over the age of four, congratulations! - You have lived in inflationary times and have seen first-hand how this works. But, when you DECREASE the amount of money available, (and, as you'll see, there are several ways to do that), there are fewer dollars to go around and prices drop. If the economy of our nation consisted of ten bushels of wheat and our money supply was ten dollars, each bushel would be worth a dollar. If our money supply suddenly inflated to $20, each bushel would be worth $2 That's inflation. But if the money supply dropped to $5, each bushel would be worth 50 cents. That may sound good, it's cheaper, but everyone's debts and monthly bills remain the same. In this economy, you are most likely a wheat farmer and you are getting half as much money for your crop every year. However, you still owe the bank the same amount every month for your mortgage, you owe the same amount to the utility company for your electricity, you have to pay the same on your car loan, clothing, insurance, groceries, gas, ... Debts don't decrease just because the money supply falls. (They should.) You suddenly find that you cannot pay your bills and neither can your neighbors. Sure, you can cut down on some little things, and you will, but by doing that, everybody else relying on your spending for their livelihood, suffers too. Businesses fail, people become unemployed, foreclosures rise, and farmers and manufacturers get less money for their crops and products. A contracting money supply creates a downward, deflationary tailspin with its probable end - a nationwide Depression (with a capital "D.") Only the wealthy prosper. How? Because, by definition, they have money and can now buy your crops, products, farms, businesses, homes, land, and labor cheaper. - A whole lot cheaper. Sound like today?

"After Franklin gave explanations on the true cause of the prosperity of the Colonies, the Parliament exacted laws forbidding the use of this money in the payment of taxes. This decision brought so many drawbacks and so much poverty to the people that it was the main cause of the Revolution. The suppression of the Colonial money was a much more important reason for the general uprising than the Tea and Stamp Act." --- Peter Cooper, industrialist, inventor, philanthropist, and Presidential candidate.

"In an evil hour, the British Government took away from America its representative money, commanded that paper bills of credit should be issued no more and cease to be legal tender, and collected the taxes in hard silver. This was in 1763. Mark the consequences. The contraction of the circulating medium paralysed all the industrial energies of the people. Ruin seized upon those once flourishing colonies; the most severe distress was brought home to every interest and every family; discontent became desperation. In 1775 the first Congress was held in Philadelphia. In 1776 America became an independent state." --- John Twells, London Banker, Parliamentary Debates, Volume 80, 1895.

Franklin reported that one year after the implementation of the Currency Act that the streets of the Colonies were filled with unemployed beggars, just like in England. The amount of circulating money had been cut in half. Franklin stated that the British Currency Act was the true cause of the American Revolution - and not the tax on tea or the Stamp Act. Franklin wrote, "The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the Revolutionary War." Robert Lantham Owen, National Economy and the Banking System of the United States, 1939. The "Tea Party" of today unintentionally perpetuates the myth that American Colonists revolted because of a $1 per year tax on tea. We would all be better served following the true lead of our Founding Fathers and revolt against the curse of debt money, the evil monster currently running amok, destroying our nation and goring us taxpayers. As you will soon see, restoring the issuance of our nation's currency to the U.S. Treasury, as demanded by our Constitution, would be a simple cure and would quickly revive our ailing economy.

"The Bank of England has played a prominent role in American history Without it, the United States would not exist. The American colonists considered themselves loyal Englishmen to a man, but when they began to enjoy unequaled prosperity by printing and circulating their own Colonial scrip, the stockholders of the Bank of England went to George III and informed him that their monopoly of interest-bearing notes in the colonies was at stake. He banned the scrip, with the result that there was an immediate depression in the commercial life of the Americas. This was the cause of the Rebellion; as Benjamin Franklin pointed out, the little tax on tea, amounting to about a dollar a year per American family, could have been borne, but the colonists could not survive the banning of their own money." --- Eustace Mullins, The World Order, 1985.

"Our early history books strangely omit the facts that for some years prior to 1773 the British Parliament had busied itself annulling the laws under which the American Colonies had exercised their fundamental right to create and issue their own money. Much is said of Taxation without Representation, but what underlies that phrase is omitted. The fact that the Bank of England manipulators, having gained control over British industry through frequent depressions, cast their greedy eyes on the commerce and industry of America, and set to work to lay hold of the money of the Colonies and, hence, the industry of the Colonists." --- Gertrude M. Coogan, Money Creators, 1935.

"Sir, there are two passions which have a powerful influence in the affairs of men. These are ambition and avarice; the love of power and love of money. Separately, each of these has great force in prompting men to action; but when unified in view of the same object, they have in many minds the most violent effects." --- Benjamin Franklin, Memoirs, Volume 1, 1834.

As the American economy progressed from bad to worse, many colonists ignored the British ban on their scrip. Various colonies, seeing the depression and destruction caused by a lack of money, reinstituted their scrip at great peril. "Says Jefferson: 'Before the 19th of April, 1775' the day succeeding the Battle of Lexington, 'I never had heard a whisper of a disposition to separate from Great Britain. The Colonies had not yet cut asunder the ties of allegiance to the Crown. The Continental Congress had sent a petition to the King denying any intention of separation from England.' But, although the Colonies were as yet uncertain of their course with respect to separation, there was no uncertainty with regard to their monetary system. This they had determined should be independent of the Crown and this determination they had expressed in overt acts that had long marked them as disaffected rebels and were now to mark them as outlaws. Lexington and Concord were trivial acts of resistance which chiefly concerned those who took part in them and which might have been forgiven; but the creation and circulation of bills by revolutionary assemblies in Massachusetts and Philadelphia, were the acts of a whole people and coming as they did upon the heels of the strenuous efforts made by the Crown to suppress paper money in America, they constituted acts of defiance so contemptuous and insulting to the Crown that forgiveness was thereafter impossible. After these acts there was but one course for the Colonies; to stand by their monetary system. Thus the bills of credit of this era, which ignorance and prejudice have attempted to belittle into the mere instruments of a reckless financial policy, were really the standards of the Revolution. They were more than this: they were the Revolution itself!" --- Alexander del Mar, The History of Money in America, 1899.

Noted historian Alexander del Mar tells us that, in spite of the taxes, and beyond the skirmishes with British troops at Lexington and Concord, it was the Colonists' legal tender monetary system that was the primary cause of the Revolutionary War. "Thus the bills of credit of this era ... were really the standards of the Revolution. They were more than this: they were the Revolution itself!" The Colonists, seeing first-hand how the English debt-money had so quickly destroyed their growing economy, resumed printing their legal-tender scrip. Printing their own colonial money, thereby defying the laws of the most powerful nation on earth, was indeed a revolutionary act.

"When Great Britain commenced the present war upon the colonies they [the colonies] had neither arms nor ammunition, nor money to purchase them, or pay soldiers. The new government had not immediately the consistence necessary for collecting heavy taxes; nor would taxes that could be raised within the year during peace have been sufficient for a year's expense in time of war; they therefore printed a quantity of paper bills each expressing to be the value of a certain number of Spanish dollars, from one to thirty. With these they paid, clothed, and fed their troops; fitted out ships and supported the war during five years against one of the most powerful nations of Europe." --- Benjamin Franklin.

Some Colonists accepted this paper money without problem, some, more loyal to the King, were coerced by law: "... any person who shall hereafter be so lost to all virtue and regard for his country as to refuse to receive said bills in payment, or obstruct and discourage the currency or circulation thereof, and shall be duly convicted ... shall be deemed, published and treated as an enemy of his country, and precluded from all trade or intercourse with the inhabitants of those colonies." --- Continental Congress Journal. Talk about being cut-off! No trade or intercourse with the other Colonists. Now that's what I would call a stiff sentence.

"By the time the first shots were fired in Lexington and Concord, Massachusetts on 19 April, 1775, the colonies had been drained of gold and silver coin by British taxation. Consequently, the Continental government had no choice but to print its own paper money to finance the war. At the start of the Revolution, the American colonial money supply stood at $12 million. By the end of the war, it was $500 million. This was partly a result of massive British counterfeiting. Consequently, the currency was virtually worthless. Shoes sold for $55,000 a pair." --- "It is a fact too well authenticated to admit of dispute that (British) Gen. Howe aided the making and uttering of counterfeit Continental bills. In the same newspaper, in New York, in which the British official documents were printed, there were also printed advertisements proposing to supply counterfeit money to persons going into other colonies, so nearly and exactly executed that no risk attended their circulation." --- Alexander del Mar, historian and first Director of the U.S. Bureau of Statistics, 1866-69; The History of Money in America, 1899.

In 1776, the British brought a printing press out the H.M.S. Phoenix, moored in the New York harbor, and started printing up "Continentals" the illegal, legal-tender money of the Colonies. They distributed these to Colonists loyal to the Crown who dutifully spent them - For the times, a very innovative strategy. These New York newspaper ads, in addition to being blatantly ballsy and letting the American rebels know they were but gnats in the eyes of England, had the added effect of planting seeds of doubt in the minds of the colonists as to the validity of all their money. Soon, Washington had a hard time purchasing supplies for his troops and the phrase, "Not worth a Continental," entered the American lexicon. "A wagon load of money will scarcely buy a wagon load of provisions." --- General George Washington.

The paper Continentals issued by the colonists promised to pay a few years after the war their face value plus interest in "Spanish milled (silver) dollars." "The fulfillment of these promises was impossible. They were made in good faith and with the hope of speedy success for the American army. For a year, the bills circulated at par with silver, and in their third year the premium on the coin was only seventy-five percent. But, as the struggle continued, the people came to realize the huge joke of attempting to redeem, in 'Spanish milled dollars,' an amount of paper, genuine and counterfeit, calling for more than fifty times the whole sum of coin in the country, and counting interest, three or four hundred times the sum of coin specified in the promises. Still, the paper circulated; and the determined, patriotic people kept passing it from hand to hand, as it went down, buying and selling with it receiving it for something until 1781. It then sank out of sight at a depreciation of five hundred per cent, but 'with indulgence for its memory,' said Jefferson, 'as a thing which had vindicated the liberties of the country' and 'fallen in the moment of victory.'

"In other words, the American people came to regard the loss on Continental money a loss borne by the whole of them as a general tax on their property, to secure American independence. Thus the losers were not cheated. It was they, in fact, who insisted on letting their losses go, and would sanction no attempt to recover them. Congress did its best to fulfill its pledges, but the people laughed away every effort to fund or redeem the currency, and 'barbers papered their shops with it.' For once we got the better of the British bullionists and counterfeiters." --- Gordon Clark, Shylock: As Banker, Bondholder, Corruptionist, Conspirator, 1894. "Continental money expired without a single groan. Not a murmur was heard among the people. On the contrary, universal congratulations took place on their seeing the gigantic mass, - whose dissolution had threatened convulsions which should shake their infant confederacy to its centre, - quietly interred in its grave." --- Thomas Jefferson.

"In 1764 the prohibition against issuing their money was extended to all the colonies. It then became mandatory for all the colonies to borrow their money into circulation at huge interest rates. It is probable that these acts were more responsible for the Revolution than any other factors. Many of our founding fathers were keenly aware of the problem this debt money created and this is one of the principle reasons why our Constitution so clearly provided for an honest money system. Article 1, Section 8, Par. 5 of the Constitution provides that 'Only Congress shall have the power to coin money and regulate the value thereof.'" --- June Grem, The Money Manipulators, 1971.

"Fortunately, for Americans and for the entire world, the founders of this country, the authors of the Constitution of the United States, knew well the supreme importance of a scientific and honest money system. Farsighted and intelligent, they took the enormous precaution of placing the power to coin money and regulate its value, with Congress alone. That power is the greatest power inherent in any people who constitute a civilized nation, because with money we make our exchanges of goods and services. The founders of this nation, being learned men, knew well the effects of allowing money creation to be made a privilege and function of private individuals. The phrase 'to regulate the value thereof' gives power to control the purchasing power of all money in the nation. Wide and sudden gyrations in the purchasing power of money have been the direct cause of more human misfortune and suffering than any other single force in the experience of civilized peoples. To entrust that power to private individuals gives them controls which can actually jeopardize the welfare of every individual in a nation." --- Gertrude M. Coogan, Money Creators, 1935.

Followup to above article [It's a 4 part article above about the potential usefulness of fiat paper money.]

WHO CREATES THE MONEY TO PAY THE INTEREST?One of the most perplexing questions associated with this process is “Where does the money come from to pay the interest?” If you borrow $10,000 from a bank at 9%, you owe $10,900. But the bank only manufactures $10,000 for the loan. It would seem, therefore, that there is no way that you – and all others with similar loans – can possibly pay off your indebtedness. The amount of money put into circulation just isn’t enough to cover the total debt, including interest. This has led some to the conclusion that it is necessary for you to borrow the $900 for the interest, and that, in turn, leads to still more interest. The assumption is that, the more we borrow, the more we have to borrow, and that debt based on fiat money is a never-ending spiral leading inexorably to more and more debt.

This is a partial truth. It is true that there is not enough money created to include the interest, but it is a fallacy that the only way to pay it back is to borrow still more. The assumption fails to take into account the exchange value of labor. Let us assume that you pay back your $10,000 loan at the rate of approximately $900 per month and that about $80 of that represents interest. You realize you are hard pressed to make your payments so you decide to take on a part-time job. The bank, on the other hand, is now making $80 profit each month on your loan. Since this amount is classified as “interest,” it is not extinguished as is the larger portion which is a return of the loan itself. So this remains as spendable money in the account of the bank. The decision then is made to have the bank’s floors waxed once a week. You respond to the ad in the paper and are hired at $80 per month to do the job. The result is that you earn the money to pay the interest on your loan, and – this is the point -the money you receive is the same money that you previously had paid. As long as you perform labor for the bank each month, the same dollars go into the bank as interest, then out the revolving door as your wages, and then back into the bank as loan repayment.

It is not necessary that you work directly for the bank. No matter where you earn the money, its origin was a bank, and its ultimate destination is a bank. The loop through which it travels can be large or small, but the fact remains all interest is paid eventually by human effort. And the significance of that fact is even more startling than the assumption that not enough money is created to pay back the interest. It is that the total of this human effort ultimately is for the benefit of those who create fiat money. It is a form of modern serfdom in which the great mass of society works as indentured servants to a ruling class of financial nobility.

[To avoid being slaves to the financiers, we should via self-government make and circulate our own money, and not let bankers do it, unless we're equal-share owners of the bank.]

50721Hudson shows that Western economies have been financialized in a predatory way that sacrifices the public interest to the interests of the financial sector. That is why the economy no longer works for ordinary people. Finance is no longer productive. It has become a parasite on the economy. Hudson tells this story in his recent book, Killing the Host (2015). Readers often ask me how they can learn economics. My answer is to spend many hours with Hudson’s book.https://billtotten.wordpress.com/2016/02/04/the-west-is-traveling-the-road-to-economic-ruin/

ECONOMISTS IN SUPPORT OF A $15 U.S. MINIMUM WAGE AS OF 2020http://www.budget.senate.gov/democratic/public/index.cfm/2015/7/top-economists-are-backing-sen-bernie-sanders-on-establishing-a-15-an-hour-minimum-wage

Bank Whistleblowers United has Plan to instill the rule of law on Wall Streethttp://www.nationofchange.org/news/2016/02/08/jail-the-bankers-and-take-back-control-over-money

A discussion on the abandonment of neoliberal economic theory by both parties during the 2016 primary seasonhttps://www.reddit.com/r/NeutralPolitics/comments/459d33/a_discussion_on_the_abandonment_of_neoliberal/t1_czwq4eq

Our dysfunctional monetary system (due to neocon alarmism about national debt: 3 graphs)https://rwer.wordpress.com/2016/02/09/our-dysfunctional-monetary-system-3-graphs/#comment-105886

IMPORTANT ADDENDUMEvergreen Cooperatives of Cleveland, OH helps employees become home owners in 5 years.http://community-wealth.org/sites/clone.community-wealth.org/files/downloads/article-wang-filion.pdf

If anyone is interested in exchanging some ever declining paper money for gold, please let me know. The company I am with offers gold in 1 gram, 2.5 gram, and 5 gram weights. I could never go into the detail it deserves here. If you're willing to listen to a 22 minute presentation (via video) that explains "Why Gold? Why Now?", please contact me. I've saved over 40 grams to date. When the dollar collapses, I want to be somewhat prepared so this is just a start. Thanks!

Debt looms over the good and bad http://rabble.ca/columnists/2016/03/debt-looms-over-good-and-bad-ontario-budget

The Financial System Is a Larger Threat than Terrorismhttp://dissidentvoice.org/2016/03/the-financial-system-is-a-larger-threat-than-terrorism/

It was NOT free trade - How America Was Builthttp://real-economics.blogspot.com/2016/03/hawb-1800s-it-was-not-free-trade-how.html

The world economy - a cross-section of news from the global economic collapsehttp://robinwestenra.blogspot.com/2016/03/the-world-economy-03122016.html

Argentina is the latest country to suffer at the hands of US vultureshttp://sandiegofreepress.org/2016/03/hedge-fund-billionaire-paul-singer-makes-argentina-cry-for-itself/

Economic Freedom: One of the Four Freedoms and the United Nations’ Universal Declaration of Human Rightshttp://neweconomicperspectives.org/2016/03/four-freedoms-united-nations-universal-declaration-human-rights-high-will-senator-sanders-aim.html

52069Russia defaulting on all its foreign debt would be payback for the twin Western manipulation of oil prices and the rublehttp://www.informationclearinghouse.info/article44466.htm

Resurfacing Economic Truths -- The perception that a rising proportion of income and wealth is an unearned “free lunch” formed the take-off point for Veblen to put real estate and financial scheming at the center of his analysis -- Veblen’s argument was that the economy was all about organizing predatory schemeshttps://dandelionsalad.wordpress.com/2012/07/30/veblens-institutionalist-elaboration-of-rent-theory-by-michael-hudson/

The Lies of Neoliberal Economics (or How America Became a Nation of Sharecroppers)http://www.counterpunch.org/2016/04/01/the-lies-of-neoliberal-economics-or-how-america-became-a-nation-of-sharecroppers

52845Breaking Up the Banks: Why Sanders is Righthttp://www.counterpunch.org/2016/04/15/breaking-up-the-banks-why-sanders-is-right

What is to be Done with the Banks? Six Proposalshttp://cadtm.org/What-is-to-be-Done-with-the-Banks,13315

American and European authorities decided to save the banks at all cost. The strategy was not only immoral, it was, in the end, impractical. The game is now up.http://www.eurekastreet.com.au/article.aspx?aeid=47209#.VyEe6CGwXMx

Panama and the Criminalization of the Global Finance Systemhttp://www.counterpunch.org/2016/04/18/panama-and-the-criminalization-of-the-global-finance-system

The Internet interprets privilege as damage and routes around it: Towards an Economics of Common Sensehttp://ronsnews.blogspot.com/2016/04/towards-economics-of-common-sense.html

The government has all the tools it needs, anytime, to resist recessionhttp://bilbo.economicoutlook.net/blog/?p=33389

What is to be Done with the Banks? Radical Proposals for Radical Changeshttps://off-guardian.org/2016/05/23/what-is-to-be-done-with-the-banks-radical-proposals-for-radical-changes

America’s Protectionist Takeoff: US industry was protected by tariffs for much of the 19th century and this helped establish it as the world’s leading economyhttps://peofdev.wordpress.com/2016/05/23/americas-protectionist-takeoff

How banks are killing the host that feeds them http://www.moneyweb.co.za/news/economy/banks-killing-host-feeds

Feder founded in 1919 one of the many battle confederations, this time the German League of Struggle for the breaking of interest servitudehttps://nationalconscience.wordpress.com/2014/09/30/1945-tyskland-star-i-brand-riket-ar-skandat-ett-valdtaget-land-svinen-har-fullbordat-valdtakten-pa-annu-ett-land

Unz on the Issueshttp://www.unz2016.org/unz-on-the-issues

How Does the US Empire Control the World? Petrodollars Rule, Ok! (Part 3) (a few months old)http://arretsurinfo.ch/how-does-the-us-empire-control-the-world-petrodollars-rule-ok-3

Insidious Economization = Insidious Deterioration: America has been doing just about everything wrong in its health carehttps://fbkfinanzwirtschaft.wordpress.com/2016/05/12/38057

Why A few of the Smartest Progressives I Know Will Vote for Trump over Hillaryhttp://trueviralnews.com/?p=185532

Economist Philip Soos encourages Australians to see neo-liberal capitalism for what it is: A racket designed to generate free banquets for the rentier classhttps://independentaustralia.net/politics/politics-display/australias-real-lifters-and-leaners,9060

Getting off the Western financial merry-go-round is Russia's ultimate lethal weaponhttps://www.sott.net/article/302031-Getting-off-the-Western-financial-merry-go-round-is-Russias-ultimate-lethal-weapon

Chinas Factory to the World Is in a Race to Survivehttp://myinforms.com/en-me/a/35555839-chinas-factory-to-the-world-is-in-a-race-to-survive

Like Russia, the Baltic States, and now Greece, the U.S. will see a massive outflow of the population due to worsening social conditions under neoliberal policyhttp://www.counterpunch.org/2016/06/07/the-wages-of-neoliberalism-poverty-exile-and-early-death

End FIRE: The role of public infrastructure is to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitivehttp://michael-hudson.com/2016/04/financial-diversion

Neoliberal Obama plans to push with the neoliberal Republicans for the fatal Trans-Pacific trade agreement after the fall electionhttp://www.washingtonsblog.com/2016/06/neoliberalism-lowers-life-expcetancy.html

54124(I don't usually post weekly in this thread, but I found something important I'd like to share here. Paul Craig Roberts published this on Lew Rockwell's libertarian website in 2008. At some time since then he has started liking Michael Hudson's articles on economics. Hudson and Modern Money Theory advocates seem to make the most sense in explaining economics, which is why I've been sharing links to their articles here and sometimes excerpts.)

lewrockwell.com/roberts/roberts257.html

I Resign From the Mont Pelerin Society

by Paul Craig Roberts

I have come to the conclusion that the Mont Pelerin Society is no longer an effective force for freedom, becoming instead another tool in behalf of US hegemony, ringing Russia with US military bases and puppet governments in the name of "supporting democracy." As far as I am aware, the MPS has not addressed the Bush administration's assault on US civil liberties or the disrespect the Bush administration has shown for the US Constitution and international law, particularly the Geneva Conventions. Nor has the society taken exception to US wars of aggression in behalf of undeclared agendas.

I don't see how the society can function in behalf of liberty when its long-time Treasurer is so closely associated with the Republican Party, now thoroughly neoconized. The alacrity with which the Heritage Foundation jumped on the Bush administration's propaganda bandwagon about "the Russian invasion of Georgia" epitomizes the new association of "freedom" with American hegemony.

As Secretary of State Rice put it (according to Matthew Lee, AP News, August 18, 16:17 EST), "'We are not going to allow Russia to draw a new line at those states that are not yet integrated into the trans-Atlantic structures', she said, referring to Georgia and Ukraine, which have not yet joined NATO or the European Union but would like to."

But, of course, the US and its NATO allies are going to draw a line around Russia.

What does the Caucasus have to do with the North Atlantic? Why is NATO, which was created to keep the Soviet Army out of Western Europe, still around almost two decades after the disappearance of the Soviet Union? Why has its membership doubled, and why is it being extended to the Black Sea? Is Mongolia next? The US strategic objective – to ring Russia with bases and puppet states in order to exercise hegemony over Russia – will lead to war, the destruction of liberty and perhaps life on earth. This gratuitously insane neoconservative foreign policy is one that will lead to nuclear war. It stands in total contradiction to the alleged values of the Mont Pelerin Society.

As every great libertarian and the founding members of the MPS acknowledged, war is the greatest enemy of liberty.

The US used force to rip Kosovo out of Serbia and to hand it to Muslim drug runners in exchange for a US military base. The US bombed Serbian civilians and accused the Serbians of war crimes. South Ossetia has been autonomous since the early 1990s from which date Russian and Georgian peacekeepers have been in S. Ossetia. The US puppet president of Georgia attacked S. Ossetian civilians with his American and Israeli trained and equipped army, killing about 2,000 and driving 30,000 into Russia, and the Georgian peacekeepers turned their weapons upon the Russian peacekeepers. The American puppet, installed by the neocon National Endowment for Democracy, committed this war crime in order to ethnically cleanse S. Ossetia of Russians and to end the separatist movement in order to smooth Georgia's entrance into NATO.

The "Russian invasion" was a response to this US-sponsored war crime. No real fact or truthful account can be found in the Heritage presentation or the US media. I do not want to be associated with an organization that is a front for American hegemony and wars based on propaganda, lies, and deceit. If Milton Friedman and F.A. Hayek were still alive, I am certain they would join me in resignation.

August 21, 2008

Paul Craig Roberts [send him mail] a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal, has been reporting shocking cases of prosecutorial abuse for two decades. A new edition of his book, The Tyranny of Good Intentions, co-authored with Lawrence Stratton, a documented account of how Americans lost the protection of law, has just been released by Random House.

54578(There are several articles linked below. Don't miss any.)The Slow Crash. The Shrinking of the Real Economyhttp://www.globalresearch.ca/the-slow-crash-the-shrinking-of-the-real-economy/5532131[Here are some highlights, but there's much more good info in the article that you may like to know.]- Bonnie Faulkner: So if I were to ask you what is wrong with deflation generally, would the answer ten be that it shrinks the economy?- Michael Hudson: That’s exactly it – lower wages, lower living standards, and more money siphoned off to creditors at the top of the pyramid. When there’s deflation, it means that although most markets are shrinking and people have less to spend, the 1% that hold the 99% in debt are getting all the growth in wealth and income. Deflation means that income is being transferred to the 1%, that is, to the creditors and property owners.- Actually, high housing prices don’t help the economy. They raise the cost of living. Everybody would be better off if they could buy housing for only, let’s say, a carrying charge of one-quarter of their income. That used to be the case 50 years ago. Buyers had to save up and make a higher down payment, giving them more equity – perhaps 25 or 30 percent. But today, banks are creating enough credit to bid up housing prices again.- The aim of promoting low down payments is to push prices back up so that fewer houses are going to be in negative equity and fewer people are going to walk away from the mortgages. That will save the banks from taking a loss on their junk mortgage loans.- Bonnie Faulkner: Why would the United States government be encouraging these risky loans?- Michael Hudson: Because the government is dominated mainly by the financial, insurance and real estate lobby, the FIRE sector. It’s called regulatory capture. The real estate interests and banks are in a kind of symbiosis. They’re the largest-growing part of the economy. This is the sector that backs the political campaigns of senators, presidents and congressmen, and they use this leverage to make sure that their people dominate the Federal Reserve, Treasury and the federal housing agencies.- The bankers ... push the loans because they don’t care if they go bad. For one thing, they may package these bad loans and sell them off to gullible institutional investors. If bankers can push the loans and make more profits for the bank, they get paid higher bonuses. They often also get stock options. If the bank goes under, they get to keep all of these salaries and options – and the government will bail out the bank. These guys will take their money and run, which is pretty much what they’re doing now. I think we’re in the take-the-money-and-run stage of the economy. So the banks may go under, but the bankers, who make the policy, clean up.- I think something like three-quarters of American currency is held abroad, by drug dealers, by tax evaders, Russians and Chinese. Other people think that they want to protect themselves against their own currency going down. When you have 75% of the currency and even more of the high-denomination $100 bills held abroad, you wonder whether these are people we really want to pay. If you get rid of the $100 bills, its foreign holders will be the main losers.- During the Bush administration and the war in Iraq, whole planeloads of shrink-wrapped $100 bills were used to buy off foreign officials and soldiers that are now ISIS. They bought off the Sunni army, they bought off the corrupt gangs, and essentially ISIS has been fueled by these shrink-wrapped billions of $100 bills that the US used to pay them to fight people who wanted to control their own currency, or groups that want to be independent, such as Syria or Russia. So this basically is an attempt to hurt drug dealers and people who America [i.e. America's 1%] doesn’t like.- Bonnie Faulkner: It seems as if the United States is willing to sacrifice Germany and the rest of Europe to conduct this war against Russia and China.- Michael Hudson: When you say the United States, we’re talking about really the neocons and a particular group within the U.S. Government. The neocons are led by the old Bush-Cheney people, including Obama and Hillary Clinton, who is to the right of Cheney. Hillary says that we should go back into Libya, that we should fight even more, and that Putin is Hitler. That means that when she comes to power you can be pretty sure that there’ll be a confrontation. If there is, a number of former generals in America have been warning that the chances of atomic [nuclear] war have never been higher. If Hillary gets in, Russia’s going to go on an immediate nuclear alert and there’s a good chance of war. But Hillary is not the United States, although the United States may end up electing her, in which case, in my mind, there’ll be a disaster.- Bonnie Faulkner: So then if there is another 2008 crash in the making, you think it will look similar to what happened then?- Michael Hudson: Yes, that’s how it happens. It’ll be yet more real estate going down, more bankruptcies, and more government giveaways [to the bankers or the 1%].- Bonnie Faulkner: Would you like to describe your new book, Michael?- Michael Hudson: It’s basically a set of definitions on junk economics and showing that what people usually receive in the mainstream is what George Orwell would call Doublethink. It’s euphemism. When people are running up more and more debt for housing, they call that “real wealth.” It exposes what’s wrong in mainstream economics and why most of the economics that justifies austerity programs and economic shrinkage in the textbooks is not scientific. Junk economics denies the role of debt and denies the fact that the economic system we have now is dysfunctional.

How the South [southern nations] paid for the Northern crises [in imperialist nations] and for its own subjugationhttp://cadtm.org/How-the-South-paid-for-the

Saker interview with Michael Hudson, best economist in the West http://peromaneste.blogspot.com/2016/06/the-saker-interviews-michael-hudson.html["The Saker" is a pseudonym for a top level American military analyst who lives in Florida, the author of the leading blog covering the Ukraine crisis, The Vineyard of the Saker, which gets an astounding 50,000 page views per day. (August - September 2014). His articles are some of the most popular on Russia Insider. Following are a few of many highlights.]- That’s the unspoken key to U.S. diplomacy: simply bribe politicians, journalists, publishers and others. As long as the U.S. Treasury can print money without limit, as long as the world’s central banks are willing to absorb these dollarized IOUs by buying U.S. Treasury bonds to finance American military spending to encircle them, America is free of the balance-of-payments and foreign debt constraint that limits other countries’ military spending.- To counter this, Russia, China and other countries should develop an alternative monetary and payments system to the U.S. dollar, a financial system to replace U.S. banks, and ultimately their own bank clearing through an alternative to SWIFT. If they succeed in this, U.S. neoconservatives will have overplayed their hand – and ironically will have become a force for world peace, by uniting the rest of the world’s economies, trade, financial and even defensive military systems to protect themselves from the U.S. threat. If they succeed, this threat will recede – but the U.S. withdrawal probably will not be a pretty sight, nor will the collapse of its financial system. The rest of the world will have to protect itself from the backwash [of the U.S.] blaming foreigners.- China doesn’t need more dollars [or trade with the U.S.]. Indeed, the more dollars it gets, the only thing it can safely do with them is lend them to the U.S. Treasury, funding the military’s “Asia Pivot” to encircle China. (That’s how the U.S. Treasury-bill standard has replaced the gold standard.)- When the great classical economists spoke of a “free market,” they meant a market free from rentier classes, free from monopolies and above all free from predatory bank credit.

EU Bankster Contagionhttp://michael-hudson.com/2016/06/eu-bankster-contagionThe Democratic Party, by rescuing Wall Street, will be unmasked as the handmaidens of the financial elite. “I expect Obama to do whatever he is told to do by Wall Street,” Hudson said. “He has turned over management of the economy to his campaign contributors from Goldman Sachs and Chase Manhattan. He does not have views of his own, other than self-promotion. He wants his presidential library. He wants to have a big foundation like the Clintons. Most of the population will oppose a bailout, of course, and he will cry all the way to the bank.”- Britain’s withdrawal from the Eurozone will damage not only the international banking system, but hamper Washington’s aggressive policies towards Russia and the Ukraine.- “I can see Trump winning the election if he opposes the coming bailout of Wall Street,” Hudson said. “By the time Obama leaves office the economy will probably be wrecked. I see us undergoing a slow crash."

55280Socrates said it's not right to repay a debt to a madmanhttp://www.washingtonsblog.com/2016/07/socrates-debt-and-the-cyclical-rise-and-fall-of-societies.html

Is the Real Scandal the Clinton Foundation?Michael Hudson says the media has failed to look beyond the emails and into potential conflicts of interest during Hillary Clinton’s tenure as Secretary of State.http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=16700

US-NATO Border Confrontation with Russia Risks Nuclear War and Loss of European Partnerhttp://www.washingtonsblog.com/2016/07/us-nato-pressures-eu-support.html

Obama pushes the world closer to nuclear war http://prorevnews.blogspot.com/2016/07/obama-pushes-world-closer-to-nuclear-war.html

As the Election Turns: Trump the Anti-Neocon, Hillary the New Darling of the Neoconshttp://www.counterpunch.org/2016/07/25/as-the-election-turns-trump-the-anti-neocon-hillary-the-new-darling-of-the-neocons

Obama Said Hillary Will Continue His [Rotten] Legacy – and Indeed She W[ould]!http://www.nakedcapitalism.com/2016/07/michael-hudson-obama-said-hillary-will-continue-his-legacy-and-indeed-she-will.html

The recently completed White Paper, U.S. Organic Hotspots and their Benefit to Local Economies ... finds organic hotspots - counties with high levels of organic agricultural activity whose neighboring counties also have high organic activity - boost median household incomes by an average of $2,000 and reduce poverty levels by an average of 1.3 percentage points. It identifies 225 counties across the United States as organic hotspots, then looks at how these organic hotspots impact two key county-level economic indicators: the county poverty rate and median household income. Organic activity was found to have a greater beneficial economic effect than that of general agriculture activity, such as chemically-intensive, conventional agriculture, and even more of a positive impact than some major anti-poverty programs at the county level. Interest in organic at the production level has grown as the demand for organic has risen. Organic food is not only better for the economy, but for human health and the environment. A comprehensive review of 97 published studies comparing the nutritional quality of organic and conventional foods show that organic plant-based foods contain higher levels of nutrients. Organic foods have [also] been shown to reduce dietary pesticide exposure.

56460Finance is Not the Economyhttp://www.washingtonsblog.com/2016/08/finance-is-not-the-economy.htmlThis is a long, detailed lesson in current economics and you may want to go to the concluding remarks at the end.

2008 All Over Again [a futile call for idiot leftists to stop supporting the 1%]https://jagadees.wordpress.com/2016/08/21/2008-all-over-againExcerpt: “If there is anyone who is responsible for the Brexit, it is Hillary Clinton and Barack Obama,” he said. “They destroyed Libya. They turned over Libyan weapons to [Islamic State], al-Qaida and [Nusra Front]. It was their war in Syria, where many of these weapons ended up, which created the massive exodus of refugees into Europe. This exodus exacerbated nationalism and anti-immigrant sentiment. Clinton and Obama are also responsible for a huge exodus of Ukrainians. This is all a response to American war policy in the Middle East and the Ukraine. In central Europe, with the expansion of NATO, Washington is meanwhile demanding that governments spend billions on weapons rather than on recovering the economy.” ... Britain’s withdrawal from the eurozone will damage not only the international banking system, but hamper Washington’s aggressive policies toward Russia and the Ukraine.

Provoking Nuclear War by Media (Milosevic was the victim of war propaganda)https://dandelionsalad.wordpress.com/2016/08/23/provoking-nuclear-war-by-media-by-john-pilger

56807The beginning of the end of Austerity? Let’s hope sohttp://www.pattayamail.com/moneymatters/beginning-end-austerity-lets-hope-147795

End This Depression By Ending Banker Occupationhttps://vidrebel.wordpress.com/2016/08/29/end-this-depression-by-ending-banker-occupationhorse237 says: September 8, 2016 at 11:13 pmOne of my favorite economists is Dr Michael Hudson. He said that we have to go beyond Left and Right to found an anti-Banker party. Dr Steve Keen is another great economist. He believes we need Debt Cancellation. I have a better plan. I say we arrest the Bankers and seize the assets they stole from us. We ought to give every adult citizen $25,000 to either pay off debts or to credit against retirement.

Celebrating the One Percent: Is Inequality Really Good for the Economy?https://vultureofcritique.wordpress.com/2016/09/20/michael-hudson-writes-that-elections-are-bought-in-much-the-way-that-consulships-were-back-in-the-closing-days-of-the-roman-republic

57254Work in a New Automation Erahttp://www.technewsworld.com/story/83919.html

Obama’s First Economic Chief Says One-Third Of Men Will Be Joblesshttp://www.breitbart.com/big-government/2016/09/29/obamas-first-economic-chief-predicts-high-unemployment-ahead

Time to “Be Alarmed” about Emerging Market Debt, UN http://ghovexx.blogspot.com/2016/09/don-quijones-time-to-be-alarmed-about.html

The Democratic Party's Plot to Privatize Social Securityhttp://www.counterpunch.org/2016/09/30/the-democratic-plot-to-privatize-social-security

Can Russia Learn From Brazil’s Fate?http://www.ocnus.net/artman2/publish/Analyses_12/Can-Russia-Learn-From-Brazils-Fate.shtml

WE'RE NO LONGER CITIZENS WE'RE CUSTOMERS: 11 suggestions which can both end a Depression and take down Bankers controlling governmentshttp://kollinos.blogspot.com/2016/10/crash-predictor-pettifor-we-re-no.html

Review of James Galbraith, Welcome to the Poisoned Chalice (2016)http://michael-hudson.com/2016/10/review-of-james-galbraith-welcome-to-the-poisoned-chalice-2016

57670Most top executives raising stock prices over the short term don't seem to understand until it's too late they are destroying their companies [or is that their intent?]http://www.technewsworld.com/story/The-Lack-of-Strategic-Thinking-in-Election-2016-83944.html

The Great Recession Hasn’t Really Endedhttp://www.counterpunch.org/2016/10/07/the-great-recession-hasnt-really-ended

It will take more than a royal commission to tame the bankshttp://www.eurekastreet.com.au/article.aspx?aeid=50003#.WAf_9vQ5rMw

The Legacy of Veblen in the Age of Post-Industrial Capitalismhttp://www.counterpunch.org/2016/10/17/the-legacy-of-veblen-in-the-age-of-post-industrial-capitalism

Money is changing and so should we – Part Onehttp://www.pattayamail.com/moneymatters/money-changing-part-one-150958

Money is changing and so should we – Part Twohttp://www.pattayamail.com/moneymatters/money-changing-part-two-151732

Before Europe Lets Uber Run Wild, It Should Consider What It Did to US Workers http://www.yesmagazine.org/new-economy/before-europe-lets-uber-run-wild-it-should-consider-what-it-did-to-us-workers-20161007

Another Victory for Workers in Seattle—This Time It’s Their Scheduleshttp://www.yesmagazine.org/new-economy/another-victory-for-workers-in-seattle-this-time-its-their-schedules-20161014

The Next Big Thing: Job Benefits That Go Where You Gohttp://www.yesmagazine.org/issues/the-gig-economy/the-next-big-thing-job-benefits-that-go-where-you-go-20161017

How Taxes Were Shifted Off Real Estatehttp://michael-hudson.com/2016/11/how-taxes-were-shifted-off-real-estate

Trump will give Infrastructure to the 1% and we'll have to pay to use ithttp://www.therussophile.org/trump-the-1.html

Century of War: Sean Stone documentary looks at reasons US middle class is 'in despair'https://www.sott.net/article/334443-A-Century-of-War-A-Sean-Stone-documentary-looks-at-the-reasons-the-American-middle-class-is-in-despair

e.Artificial intelligence could replace almost half of U.S. jobs over the next 20 yearshttps://www.sott.net/article/337645-Artificial-intelligence-could-replace-almost-half-of-US-jobs-over-the-next-20-years

EU Shoots Itself in the Foot by Prolonging Sanctions on Russia. Will Trump Normalize Relations with Moscow? http://www.globalresearch.ca/eu-shoots-itself-in-the-foot-by-prolonging-sanctions-on-russia-will-trump-normalize-relations-with-moscow/5564658

Sovereign Money Intro: Reform the banking system by removing the ability of banks to create moneyhttp://positivemoney.org/2016/12/sovereign-money-an-introduction

The Case For And Against Universal Basic Incomehttp://www.dailywire.com/news/11548/case-and-against-universal-basic-income-aaron-bandler

A lying government pushing economy towards recession and greater inequalityhttp://bilbo.economicoutlook.net/blog/?p=35014#comment-47241

It’s been a truly fantastic year for Positive Money.http://positivemoney.org/2016/12/year-2016

Progressives Need to Promote Deficit Spending Before Trump Makes It His Babyhttp://www.nakedcapitalism.com/2016/12/progressives-need-to-promote-deficit-spending-before-trump-makes-it-his-baby.html#comment-2733881

Federal Reserve Initiates Dollar End Game As Trump Heads To White Househttp://www.activistpost.com/2016/12/federal-reserve-initiates-end-game-trump-heads-white-house.html#comment-64735

Modern Money Theory and the Demonetisation Catastrophe in Indiahttp://www.mainstreamweekly.net/article6922.html

(Late Additions)U.S. Pro-Regulation Advocates have Polling on their Side in Battles with the GOP and Incoming Trump Administrationhttp://www.globalresearch.ca/u-s-pro-regulation-advocates-have-polling-on-their-side-in-battles-with-the-gop-and-incoming-trump-administration/5565308

*What is ‘Financial Imperialism’? Greece and the Eurozone Periphery as Harbinger of Things to Comehttp://www.globalresearch.ca/what-is-financial-imperialism-greece-and-the-eurozone-periphery-as-harbinger-of-things-to-come/5566907

Blame The Press If Trump Didn't Discuss His Economic Agendahttp://www.zerohedge.com/news/2017-01-12/blame-press-if-trump-didnt-discuss-his-economic-agenda

Cryptocurrencies – Financial Systems With The Highest Cybersecurity Standards On The Planethttps://www.deepdotweb.com/2017/01/12/cryprocurrencies-financial-systems-highest-cybersecurity-standards-planet

Shifting from Central Planning to a Decentralised Economy: Do We Need Central Banks?http://www.globalresearch.ca/shifting-from-central-planning-to-a-decentralised-economy-do-we-need-central-banks/5568753

India’s Rising Income Inequality: Richest 1% Own 58% of Total Wealthhttp://www.globalresearch.ca/indias-rising-income-inequality-richest-1-own-58-of-total-wealth/5568812

Trump and the Debate on America’s Infrastructure: How to Cut Infrastructure Costs in Halfhttp://www.globalresearch.ca/trump-and-the-debate-on-americas-infrastructure-how-to-cut-infrastructure-costs-in-half/5570974

Ron Paul: Economic Collapse Imminent Trump will Get the Blame Instead of the FEDhttp://thefreethoughtproject.com/ron-paul-economic-collapse-federal-reserve

A year ago in v/Worldnews: Iceland Forgives Entire Population of its Debt. Total US Media Blackouthttps://voat.co/v/Worldnews/834678

[VERY IMPORTANT] Eight people own more than half the world’s population: How the Money System is rigged for the Wealthyhttp://positivemoney.org/2017/02/global-inequality-2

WILL THE TRUMP TEAM RENATIONALIZE THE FEDERAL RESERVE AND USHER IN BONANZA ERA FOR THE USA?https://birdflu666.wordpress.com/2017/02/07/goldman-sachs-starts-to-worry-about-trump-will-the-trump-team-renationalize-the-federal-reserve

Remove the ability of banks to create money, in the form of bank deposits, when they make loanshttp://positivemoney.org/our-proposals/sovereign-money-introduction

Why Failing to Solve Personal Debt Will Usher in a New Dark Agehttp://www.nakedcapitalism.com/2017/02/michael-hudson-why-failing-to-solve-personal-debt-and-polarization-will-usher-in-a-new-dark-age.html

Monetary sovereignty and euro member stateshttps://forum.nationstates.net/viewtopic.php?f=20&t=402685

Money Creation & Interest: Is there enough money to pay off all the interest? (Part 1)http://positivemoney.org/2017/02/interest

63344Trump’s Economic Policies Are No Answer to Our Problemshttp://www.globalresearch.ca/trumps-economic-policies-are-no-answer-to-our-problems/5575784

There’s More Than Robo Signatures To Blame For The Ongoing Foreclosure Scandalhttp://www.globalresearch.ca/foreclose-this-there-s-more-than-robo-signatures-to-blame-for-the-ongoing-foreclosure-scandal/21394

The Deregulation and Privatization of Hydro-Electric Power: Ontario’s Hydro ‘Mistake’http://www.globalresearch.ca/the-deregulation-and-privatization-of-hydro-electric-power-ontarios-hydro-mistake/5576229

Privatization and Corporate Plunder: The Bait and Switch of Public-Private Partnerships (PPP)http://www.globalresearch.ca/privatization-and-corporate-plunder-the-bait-and-switch-of-public-private-partnerships-ppp/5576789

Shocking revelation: private equity does not help African developmenthttp://www.taxresearch.org.uk/Blog/2017/03/24/shocking-revelation-private-equity-does-not-help-african-development/comment-page-1/#comment-776305

Money Creation & Interest: Is there enough money to pay off all the interest? (Part 1)http://positivemoney.org/2017/02/interest

Money Creation & Interest: Is there enough money to pay off all the interest? (Part 2)http://positivemoney.org/2017/03/interest-2

COMING DEBT CRISIS INCREASES RISK TRUMP AND THE BANKSTERS WILL TRY TO START WORLD WAR 3 OR LAUNCH EBOLA FALSE FLAG SOONhttps://birdflu666.wordpress.com/2017/04/11/coming-debt-crisis-increases-risk-trump-and-the-banksters-will-try-to-start-world-war-3-or-launch-ebola-false-flag-soon

Trumponomics – Yes, Manufacturing Can and Will Return – And Wages Are Going Up, Bigly…https://theconservativetreehouse.com/2017/04/01/trumponomics-yes-manufacturing-can-and-will-return-and-wages-are-going-up-bigly

Moscow And Beijing Join Forces To Bypass US Dollar In Global Markets, Shift To Gold Tradehttp://www.zerohedge.com/news/2017-04-01/moscow-and-beijing-join-forces-bypass-us-dollar-global-markets-shift-gold-standard

Retailers are going bankrupt at a staggering ratehttp://www.businessinsider.com/retailers-are-going-bankrupt-at-a-staggering-rate-2017-4

65539Public Banking: What a State-Owned Bank Can Do for New Jerseyhttp://www.globalresearch.ca/public-banking-what-a-state-owned-bank-can-do-for-new-jersey/5584587

A Financial Toll Tax: Transform, Not Reform, The U.S. Tax Systemhttp://www.globalresearch.ca/a-financial-toll-tax-transform-not-reform-the-u-s-tax-system/5584857

Debt and the Subordination of Latin America: Mexico Proved That Debt Can Be Repudiatedhttp://www.globalresearch.ca/debt-and-the-subordination-of-latin-america-mexico-proved-that-debt-can-be-repudiated/5585252

65983B.C.’s economy relies on the selling off of real estate instead of actual jobshttps://vreaa.wordpress.com/2017/04/30/b-c-s-economy-relies-on-the-selling-off-of-real-estate-instead-of-actual-jobs-its-reached-the-point-where-we-dont-have-much-to-sell-other-than-the-land-itself

Setting the record straight: Sovereign Money is not Full-Reserve Bankinghttp://positivemoney.org/2017/04/sovereign-money-is-not-full-reserve-banking

Economists are bribed by contributions to universities and by employment at think tankshttps://mythfighter.com/2017/05/02/why-are-you-so-surprised-america-it-is-you-who-caused-this

LF Economics Book Review: Game of Mateshttps://www.lfeconomics.com/analysis/lf-economics-book-review-game-of-mates

Michael Hudson, how do we extricate the economic parasites from the main street host?https://phiborjam.wordpress.com/2017/05/05/michael-hudson-how-do-we-extricate-the-economic-parasites-from-the-main-street-host

66467Trumps Tax Plan Is Brilliant Politics and Even Better Economicshttps://fee.org/articles/trump-s-tax-plan-is-brilliant-politics-and-even-better-economics/?utm_source=zapier&utm_medium=facebook

Artificial intelligence to take over half of all jobs in next decadehttps://www.sott.net/article/349487-Artificial-intelligence-to-take-over-half-of-all-jobs-in-next-decade-says-Chinas-top-techie

The Student Debt Crisis in America: Nothing Less Than A Student Debt Jubilee Will Dohttp://www.globalresearch.ca/the-student-debt-crisis-in-america-nothing-less-than-a-student-debt-jubilee-will-do/5586662

The Usury Based System. Towards A Worldwide Financial Disaster?http://www.globalresearch.ca/the-usury-based-system-towards-a-worldwide-financial-disaster/5587245

The Economics of the Futurehttp://www.globalresearch.ca/the-economics-of-the-future/5588300

67121Trumps Tax Plan Is Brilliant Politics and Even Better Economicshttps://fee.org/articles/trump-s-tax-plan-is-brilliant-politics-and-even-better-economics/?utm_source=zapier&utm_medium=facebook

Artificial intelligence to take over half of all jobs in next decadehttps://www.sott.net/article/349487-Artificial-intelligence-to-take-over-half-of-all-jobs-in-next-decade-says-Chinas-top-techie

The Student Debt Crisis in America: Nothing Less Than A Student Debt Jubilee Will Dohttp://www.globalresearch.ca/the-student-debt-crisis-in-america-nothing-less-than-a-student-debt-jubilee-will-do/5586662

The Usury Based System. Towards A Worldwide Financial Disaster?http://www.globalresearch.ca/the-usury-based-system-towards-a-worldwide-financial-disaster/5587245

The Economics of the Futurehttp://www.globalresearch.ca/the-economics-of-the-future/5588300

67635Socialism And The Incentive Problemhttps://www.hiddendominion.com/socialism-and-the-incentive-problem

President Trump considers breaking up large bankshttp://www.france24.com/en/20170501-trump-considers-breaking-large-banks-report?ns_source=outbrain&ns_campaign=lien&ns_mchannel=acquisition&ns_linkname=editorial&aef_campaign_ref=outbrain_france24en-site&campaign_date=inconnue

In brief: the economics of Hyman Minskyhttps://peofdev.wordpress.com/2017/06/13/in-brief-the-economics-of-hyman-minsky/

In praise of cash https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost

Basic Income https://www.reddit.com/r/BasicIncome/comments/6gbsbr/so_is_ubi_just_the_end_stage_of_capitalism/dir1ryp/

Some Remarks on MMT & Marxism in Light of David Harvey’s “Marx, Capital, and the Madness of Economic Reason”http://www.nakedcapitalism.com/2017/07/some-remarks-on-mmt-marxism-in-light-of-david-harveys-marx-capital-and-the-madness-of-economic-reason.html

Gresham's law as a Tool of Regulationhttp://holtesthoughts.blogspot.com/2017/07/greshams-law-as-tool-of-regulation.html

A Memo From MMT’s Legal Departmenthttp://www.nakedcapitalism.com/2017/07/memo-mmts-legal-department.html

The Economic Argument Against Mass Immigration To Canada http://www.eurocanadian.ca/2017/07/the-economic-argument-against-mass-immigration.html

An Overview of the Economics of Cryptographic Tokens and Initial Coin Offerings (ICOs)https://www.deepdotweb.com/2017/07/06/overview-economics-cryptographic-tokens-initial-coin-offerings-icos/

Stock on Trumponomicshttp://michael-hudson.com/2017/08/stock-on-trumponomics/

Executive order allowing US Treasury to print money would bring US out of debt death spiralhttps://birdflu666.wordpress.com/2017/08/04/executive-order-allowing-us-treasury-to-print-money-would-bring-us-out-of-debt-death-spiral/

HOW TO FUND $16 TRILLION “…to form a more perfect union…” without increase in debt or taxeshttps://bestsolutionsfl.wordpress.com/2017/10/04/how-to-fund-16-trillion-to-form-a-more-better-union-without-increase-in-debt-or-taxes/

How to fund a universal basic income without increasing taxes or inflationhttp://www.intrepidreport.com/archives/22323

Michael Hudson on The American School of Political Economyhttps://peofdev.wordpress.com/2017/10/09/michael-hudson-on-the-american-school-of-political-economy/

Fund Universal Basic Income Without Upping Taxes or Inflation https://www.truthdig.com/articles/fund-universal-basic-income-without-increasing-taxes-inflation/

The hopelessly corrupt structure of the Eurozone & the Eurogrouphttps://thesaker.is/the-hopelessly-corrupt-structure-of-the-eurozone-the-eurogroup

Donald Trump will only be a winner if he takes on the private Fed Reserve and Wall Street, ending a rigged systemhttps://birdflu666.wordpress.com/2017/10/18/urgent-donald-trump-will-only-be-a-winner-if-he-takes-on-the-private-fed-reserve-and-wall-street-ending-a-rigged-system-will-make-him-personally-and-all-america-prosperous-again/

The failure of multi-party democracy in Indiahttp://peoplesvoice.in/2017/10/18/failure-multi-party-democracy-india/

How to Fund a Universal Basic Income Without Increasing Taxes or Inflationhttps://blog.p2pfoundation.net/how-to-fund-a-universal-basic-income-without-increasing-taxes-or-inflation/2017/10/19

Wells At The World's End http://wellsattheworldsend.blogspot.com/2017/10/the-elements-of-reconstruction-1916.html#1508550727409

Monetary History Calendarhttps://monetarycalendar.wordpress.com/2017/10/22/october-22-28/

Patriotic Swiss central bankers do the opposite of the US private Fed, dash to lower interest rates and save the real economy from being wiped out ahead of referendum on sovereign money in 2018https://birdflu666.wordpress.com/2017/10/22/patriotic-swiss-central-bankers-do-the-opposite-of-the-us-private-fed-to-save-the-real-economy-from-being-wiped-out/

JOHN KELLY SIDES WITH GOLDMAN SACHS IN TAKE DOWN OF USA, ALLOWS GLOBALIST STEVE MNUCHIN TO SHORTLIST ALL FIVE CANDIDATES FOR FED, AMERICA’S DESTRUCTION NOW VIRTUALLY INEVITABLEhttps://birdflu666.wordpress.com/2017/10/23/john-kelly-sides-with-goldman-sachs-in-take-down-of-usa/

How would money (and the world) be different after reform?https://jagadees.wordpress.com/2017/10/27/bank-robbery-how-would-money-and-the-world-be-different-after-reform/

Monetary History Calendarhttps://monetarycalendar.wordpress.com/2017/10/29/october-29-november-4/

Catalonian Republic races to create its own currency and turn itself into economic fortresshttps://birdflu666.wordpress.com/2017/10/29/catalonian-republic-races-to-create-its-own-currency-and-turn-itself-into-economic-fortress/

Money creation in a post-crisis worldhttp://www.coppolacomment.com/2017/10/money-creation-in-post-crisis-world.html

*How change can come quickly, if we want it tohttps://www.thersa.org/discover/publications-and-articles/rsa-blogs/2017/11/battle-of-the-systems-2-how-change-can-come-quickly-if-we-want-it-to

Forced recession as a tool of social war against the 99%https://www.therussophile.org/forced-recession-as-a-tool-of-social-war-against-the-99.html/

Bitcoin is not the future of moneyhttps://beyondoverton.wordpress.com/2017/11/06/bitcoin-is-not-the-future-of-money/

Bundesbank rejects 100%-money based on sophistry and false claimshttps://rwer.wordpress.com/2017/05/16/bundesbank-rejects-100-money-based-on-sophistry-and-false-claims

73458Your patriotic dutyhttps://monetarysov.wordpress.com/2017/12/22/your-patriotic-duty/Liz Harris says: December 25, 2017 at 7:21 pm Many thanks for your questions._Q. Do you support RMM’s idea of taxing the rich as a sort of measure to bring equilibrium to the economy?_A. No. Rather than bringing the rich down, I favor bringing the masses up via increased deficit spending, combined with a carefully structured New Deal-type program. That is, I don’t want all federal dollars to be sucked up by the rich and the bankers. If the U.S. government was not careful, increased deficit spending could make private debt even worse. For example, if people had more money to pay on their student loans, then college tuition would rise higher than ever, so that colleges could steal the extra money. There would be no debt relief.Taxes can be used to widen or narrow the gap between the rich and the rest. However the rich pay no taxes anyway. If the rich were forced to pay taxes, they would order the Congress to reverse the order. Besides, federal tax revenues are destroyed. All things considered, taxing the rich is not a good way to reduce inequality. _Q. Do you oppose the idea that taxes drive money merely because you think it’s wrong? Or is there some policy you would like to see implemented that conflicts with this idea?_A. I oppose it because it is wrong (erroneous). Like I said above, if taxes fell to zero, everyone would still want and use money. Clearly what gives value to money is not taxes, but laws, social convention, and the social need for a medium of exchange. _A U.S. currency note has the words, “This note is legal tender for all debts public and private.” This is a federal law issued by the federal government. What “backs” a dollar is federal law, plus everyone’s “full faith and credit” — i.e. everyone’s agreement that a dollar is worth a dollar. These two factors (law and faith) sustain each other. _A government may impose taxes for one reason or another, but that does not mean that “taxes drive money.” Why repeat that mantra anyway? (Taxes drive money.) It’s unnecessary, and it confuses people. “You say the federal government doesn’t need tax revenue, and yet you say it does, because without taxes, money would be worthless.”_Huh? This is one of the things about MMT that are silly, and even insulting. Another is the “jobs guarantee.” In the 1930s the New Deal created jobs by commissioning and funding projects without any “jobs guarantee.” _When you tell this to MMT people, they become angry. Whatever. I don’t waste time with such foolishness.

He died for our debt, not our sins https://www.therussophile.org/he-died-for-our-debt-not-our-sins.html/

Dumb Ellen Brown - Student Debt Slavery: Bankrolling Financiers on the Backs of the Young http://mikenormaneconomics.blogspot.com/2017/12/ellen-brown-student-debt-slavery.html

Will Trump’s Infrastructure Plan Become Another Attack on Democracy?http://www.reader.us/will-trumps-infrastructure-plan-become-another-attack-on-democracy/

There’s Going To Be A Bloodbath That Is Probably Going To Take More Than Four Yearshttps://dandelionsalad.wordpress.com/2018/01/02/michael-hudson-theres-going-to-be-a-bloodbath-that-is-probably-going-to-take-more-than-four-years/

Postcards from the End of [the] America[n Empire] http://linhdinhphotos.blogspot.com/2018/01/a-comment-at-unz.html

Positive Money: What we achieved together in 2017https://geistblog.org/2017/12/28/what-we-achieved-together-in-2017/

Yes, there is a simple, straightforward way to reduce violent crime, Give the poor more affordable resourceshttps://mythfighter.com/2018/01/02/yes-there-is-a-simple-straightforward-way-to-reduce-violent-crime-really/

The Fed-, The Gov, Cause of The Great Depressionhttps://academic-essay.000webhostapp.com/2018/03/the-fed-the-gov-cause-of-the-depression

Ignore the most misleading words in economics (“debt” and “deficit”) and the reasons for Trump’s import dutieshttps://mythfighter.com/2018/03/10/ignore-the-most-misleading-words-in-economics-and-the-reasons-for-trumps-import-duties/

Yet another article that relies on you being ignorant about federal finances and Social Securityhttps://mythfighter.com/2018/03/11/yet-another-article-that-relies-on-you-being-ignorant-about-federal-finances-and-social-security/

The really, really, really simple arguments for Monetary Sovereigntyhttps://mythfighter.com/2018/04/30/the-really-really-really-simple-arguments-for-monetary-sovereignty/- The federal government cannot run short of dollars and does not need taxes to fund its spending.- Federal deficit spending does not cause inflation or hyperinflation.